Livestock Report

Ben DiCostanzoGeneral Commentary, Livestock

Live Cattle

On Monday August 13, 2018 the October Live Cattle contract broke down below the 112.25 – 108.175 trading range, trading to a low of 107.65 and settling at 108.15. It settled below the key level at 108.65 and the 108.175 low. It couldn’t get below the 107.35 support level on the break down however, so support is containing the selling. A break down from here could lead to a test 0f support at 106.025 and then 104.85.A recovery above 108.65 could see price move towards resistance at 110.80. On Friday, trade and demand was moderate in the Texas Panhandle. Compared to last week live purchases traded 3.00 lower at 111.00. Trade was light on light to moderate demand in Kansas, the Northern Plains and the Western Cornbelt. In Kansas compared to last week, live purchases traded mostly 3.00 lower from 110.00-111.00, bulk at 111.00. In the Northern Plains live traded unevenly steady compared to Thursday from 110.00-111.00. On Thursday in Nebraska, dressed cattle traded at 175.00. In the Western Cornbelt compared to Thursday, purchases traded unevenly steady with live ranging from 109.00-112.00, bulk from 109.00-110.00. Dressed ranged mostly from 174.00-176.00. On Monday negotiated cash trade was mostly inactive in all major feeding regions. Monday afternoon beef cutout values were higher on good demand and moderate offerings. Choice was up 1.82 at 208.43 with Select up 1.89 to close at 199.66 on 103 loads. The choice/ select spread narrowed to 8.77. The hide and offal value from typical fed cattle for today was estimated at 9.23 per cwt live, unchanged from Friday’s value. The estimated cattle slaughter for Monday was reported at 118,000.

Feeder Cattle

The September Feeder Cattle contract continued its consolidation within the August 8th trading range (150.25 – 147.20), making its 3rd inside candle in a row as it traded between 149.45 and 148.00. The coiling in Feeder Cattle could lead to a directional move once it breaks out of the consolidation. A break down could see price test support at 146.20 and 145.05. Support then comes in at 144.20. A breakout higher could see resistance tested at 150.90 and then 151.55. Resistance is then at 152.30.

Lean Hogs

The October Lean Hogs contract rallied early in the trading session, testing resistance at 53.80 as it made its high at 53.775. It broke down It broke down from here, testing support at 51.80 and settling just below it at 51.65. It formed an inside candle and trading below the 50.80 low could see price test support at 49.925 and then 48.725. Support then comes in at 47.40. A rally from settlement could see price revisit the high. Resistance then comes in at 55.475.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 16th 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.

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

             888.391.7894

Fax: 312.256.0109,

bdicostanzo@walshtrading.com

www.walshtrading.com

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.