Live Cattle
On Tuesday August 14, 2018 the October Live Cattle contract traded back into the 112.25 – 108.175 trading range, climbing up to the Monday high (108.85) and settling nearby at 108.725. It stayed above the 107.35 support level again, making the low at 107.90. It also formed a bullish engulfing candle. A break down from settlement could lead to a test of the Tuesday low. A breakdown below the 107.35 support level could see support at 106.025 tested. A rally above 108.65 could see price move towards resistance at 110.80. On Tuesday negotiated cash trade was mostly inactive in all major feeding regions. There were some trading in Iowa at 108-109 on a live basis and 173.00 dressed. Tuesday afternoon boxed beef cutout values were higher on moderate to good demand and light to moderate offerings. Choice was up 1.21 at 209.64 with Select up 1.61 to close at 201.27 on 91 loads. The hide and offal value from typical fed cattle for today was estimated at 9.21 per cwt live, down 0.02 from Monday’s value. The estimated cattle slaughter on Tuesday was reported at 119,000.
Feeder Cattle
The October Feeder Cattle contract took over the top spot as its volume surpassed the September volume. It doesn’t change much as the price ranges were nearly identical. It continued the consolidation within the August 8th trading range (150.25 – 147.20. 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 consolidated yet again, trading within the Monday range, forming another inside candle and a narrow range day. It is the smallest range in the last 4 trading sessions as the market tries to figure direction. The range was 52.925 – 51.50. A rally above the high could test resistance at 53.80. Resistance then comes in at 55.475. A breakdown below the low could see price test support at 49.925 and then 48.725.
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.
**Call me for a free consultation for a marketing plan regarding your livestock needs.* *
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109,
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.