February Live Cattle made a new high on Friday, trading up to 125.65 in a slow, quiet trading session. It couldn’t get past resistance at 125.80 and pulled back to settle at 124.975. It was another tiny trading range as bulls had a difficult time extending the rally. With cash quiet during the trading session, traders couldn’t get excited and drive price higher. Cash started to trade a little bit after the trading session with 124.00 trading on a live basis and 197.00 for dressed. The amount traded so far has been light according to the mandatory reports from the USDA. Both producers and packers have so far refused to budge from their price positions. Packers are looking to pay steady and producers want 126.00 – 127.00 for live and 200 – 202 for dressed. We’ll find out on Monday where the buying took place. Cutouts are dropping with choice down 1.50 to 212.46 and select also down 1.50 to 206.27. Slaughter for the week expected to be at 626,000, a much lighter volume than we have seen recently. Futures have resistance at 125.80 and then 126.625. A breakout above here puts 128.10 in play. An inability to rally could see consolidation continue in the February contract. March Feeder Cattle continued its consolidation within the Tuesday trading range. A rally past the Tuesday high could see strong resistance at 147.30, the previous high (147.575) and the 200 DMA at 147.975. A failure to push higher could continue the consolidation within the Tuesday range. February Lean Hogs broke down and traded exactly to support at the 50 DMA (62.425). It settled just above it at 62.65. A continuation lower could see another retest of support at 61.80. If the 50 DMA holds a retest of resistance at 63.325is possible. The 200 DMA is next at 64.325.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, January 17th 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.