On Wednesday August 8, 2018 the October Live Cattle contract continued to consolidate, trading down to 110.05 and then rallying all the way up past the 110.80 resistance level to the high at 111.10. Wow! It settled at 111.00. If settlement holds, price could test the 112.35 resistance level. Resistance then comes in at 113.90. A failure from 110.80 could challenge support at 109.825 and then 108.85. Negotiated cash trade on Wednesday was mostly inactive in all major feeding regions. Wednesday afternoon boxed beef cutout values were steady to firm on moderate to fairly good demand and moderate to heavy offerings. Choice was up 0.24 at 205.73 with Select up 0.35 to close at 198.86 on 156 loads. The choice/ select spread narrowed to 6.87. The hide and offal value from a typical slaughter steer for today was estimated at 9.27 per cwt live, unchanged when compared to Tuesday’s value. Estimated cattle slaughter for today is 120,000.
The September Feeder Cattle contract made a new low early in the trading session, trading to 147.20, just below the 147.35 support level. Feeders rallied then consolidated above the 148.40 key level and then shot higher at settlement to close at 149.75, just below the 149.975 resistance level. The post settlement period saw price make the high of the day at 150.25. A rally from settlement could see price test resistance at 150.90 and then 151.55. Resistance is then at 152.30. A break down from settlement could see price revisit the Tuesday low.
The October Lean Hogs contract gap opened lower and sank to another new low for the down move. It broke down below the 48.725 support level and traded to 48.075 before consolidating and settling at 48.40. The settlement below support could lead to another new low if the futures break down and test support at 47.40. Support then comes in at 45.10. If Hogs rally from settlement resistance comes in at the gap formed from the lower open between the Wednesday high (49.65) and the Tuesday low (49.875).
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 9th at 3:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.* *
Senior Market Strategist
Walsh Trading, Inc.
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.