February Live Cattle broke out above resistance at 125.80 trading up to a new high for the up move at 127.10 on Tuesday, January 15, 2019. Winter weather worries as the cold snowy conditions lead to worsening feedlot conditions and lighter cattle send futures higher. Wintry storm systems have been hitting the cattle regions and more are coming. The weather premium is building. Cutouts are steady so demand seems stable and packers’ margins though declining are good for this time of year. Cash continues its silence during the early part of the week but as futures rally producers are hopeful they are gaining leverage in pricing cattle. Futures settled at 126.95 which is above the 126.625 resistance level. A continuation higher could lead to a test of resistance at 128.10. A failure from settlement could see consolidation within the Tuesday range. Meanwhile, the March Feeder Cattle continues to spin its wheels within the January 8th trading range. A break out above the 146.475 high could lead to a test of the 200 DMA at 148.10. A break down below 143.05 could lead to a test of the 140.775 support level. February Lean Hogs continue to consolidate between the 200 DMA (64.20) and the 61.80 Support level. A breakout above the 200 DMA could lead to a test of resistance at 66.55. A break down below 61.80 could lead to a test of support at 59.925.
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.