Anticipation of higher cash prices pushed April Live Cattle higher today as it tested resistance at 128.10 (session high), before settling just under it at 127.925. A breakout above 128.10 could see price challenge the January 31st high at 129.475. Resistance is just above it at 129.825. A failure from settlement could see price revisit support at 126.625. Even with the rally price remains in a trading range. So far (mid-afternoon) the USDA has reported cash has traded moderately on moderate demand in Nebraska and the Western Cornbelt at 200.00 on a dressed basis. Trade is slow in all other feeding regions as producers continue to pass on current bids.
A hedge idea for cattle producers – buy the April 125 put and sell the 131 call at even money plus commission and fees.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, February 14th 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.* *
Senior Market Strategist
Walsh Trading, Inc.
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.