Live Cattle
On Monday negotiated cash trade was mostly inactive in all major feeding regions. Monday afternoon beef cutout values were higher to sharply higher on moderate to good demand and moderate offerings. Choice was up 2.60 at 213.98 with Select up 1.37 to close at 202.29 on 101 loads. The choice/ select spread widened to 11.69. The hide and offal value from typical fed cattle for today was estimated at 9.27 per cwt live, up 0.01 from Friday’s value. The estimated cattle slaughter for Monday was reported at 118,000. For Friday in the Texas Panhandle trading was slow on light demand. In Kansas trading and demand were moderate. In the Southern Plains, compared to last week, the bulk of live trades moved 0.50 lower at 110.50. On Friday in Nebraska trading and demand were moderate. Compared to Tuesday the bulk of live trades moved 0.50 higher at 110.00. Compared to last week the bulk of dressed trades moved 2.00 lower at 173.00. Friday in Colorado saw trading slow on light demand. Compared to last week live trades moved 0.50 lower at 110.50. For Friday in the Western Cornbelt trading and demand were moderate. Compared to last week the bulk of live cash trades moved steady-1.00 lower from 109.00-110.00. Compared to the prior week the bulk of dressed cattle moved 1.00-3.00 lower at 173.00. On Monday August 20, 2018 the October Live Cattle contract consolidated Friday’s gains, trading (111.075 – 110.275) in the upper part of the range (11.475 – 109.075). A rally above the high could see price test resistance at 112.075 – 112.35. A breakdown from the low could see price test the Friday low and then support at 108.65. Support then comes in at 107.35.
Feeder Cattle
The October Feeder Cattle contract poked its nose above the Friday high (152.075) trading just past resistance at 152.30, making the high at 152.35 before falling back and settling at 151.275. The failure at resistance could lead to a pullback if Feeders breaks down below support at 150.90. Support comes in at 149.975 and then 148.40. A recovery from settlement could see price revisit the 152.30 resistance level. Resistance then comes in at 153.50.
Lean Hogs
The October Lean Hogs contract started off strong, trading to a new high for the up move, reaching 59.50 before collapsing and trading to the low at 55.975. The rally failed just below resistance at 59.825 and the collapsed stopped just above support at 55.475. It settled at 56.475. A breakdown from settlement could see price test the gap from the Friday low at 55.70 to the Thursday high at 55.475). Closing the gap could see price move towards the 53.80 support level. A recovery from settlement could see consolidation within the Monday range.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 23rd 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.