February Live Cattle reversed course yet again, trading up from yesterday’s lows and moving higher all session long. It inched out a new high at 121.75, trading above the November 30 high of 121.625. It ended the session near the high and sets up a possible break out scenario for Wednesday. If Cattle opens higher on strong volume look to get long futures as a move towards resistance at 122.825 and then 123.30 is possible. Place stops according to your account size and risk tolerance. A failure from the high keeps cattle in its trading range. Feeder Cattle tested support at 143.50 making a new low for the down move at 143.125. It settled in the middle of the trading range and could be dragged higher if the fats rally tomorrow. Lean Hogs broke down and traded towards support at the 200 DMA (65.20), making the low just above it at 65.525. China is once again jawboning that they have the African swine fever under control, so can anyone believe what they are saying? When they talk you should watch what they do. If they come in and are buying US pork, I think that means they don’t have the disease under control. If they don’t buy US pork, I think it means they want to drive pork prices lower so they can buy it cheaper.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, December 6th 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.