Cattle markets broke down today as steady cash trade on Friday fails to impress. March Feeder Cattle broke down past support at 143.50 and traded down to the December 4th low at 143.125 on the continuous chart. It settled nearby at 143.325. A new low on Tuesday could see price test support at 142.40. A panic sell could see price press and the next support level is at 140.775. A calming down could see price consolidate within Monday’s range. February Live Cattle traded to a low of 121.10, just above the 21 DMA at 121.00. Support is at the 21 DMA, 120.75 and then 119.15. Resistance is at 121.90 and then 122.85. Cash traded at 119.00 on a live basis on Friday and 187 for dressed. With a short slaughter week due for the Christmas holiday, expectations are for cash to trade lower this week. Traders were hoping for a cash trade at 120.00 or above r last week and the steady trade disappointed. The upcoming holiday weeks should see slaughter decline and therefore packer demand to wane. Showlists for this week are lower but that should not help producers. Demand has held up well for 2018 and so has supply. With 2019 around the corner, traders will be watching for any sign of demand weakness because expectations are for high levels of supply to continue down the road.
For those interested I hold a weekly grain(with Sean Lusk) and livestock webinar on Thursday, December 20th 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 uponcompletion 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.