Live Cattle
The June Live Cattle broke down from the open (124.975) on Monday, May 15, 2017, trading down limit to the low of the day at 122.175. It bounced off the limit and then spent the rest of the session consolidating between 123.30 and 122.35. It ended the day near the low at 122.425. The low is near the 21 DMA at 122.25. Trendline support for Tuesday’s trade will be at 122.075. A breakdown below support could lead to a test of support at 121.325 and the 120.075. A bounce off support could see a test of resistance at 123.30 and then 124.65. Negotiated cash trade was inactive on Monday on light demand in all feeding regions. Boxed beef cutout values were higher on choice (up 1.71 to 249.90) and slightly lower on select (down .01 to 225.50) on 87 loads. Estimated slaughter came in at 115,000.
Feeder Cattle
The August Feeder Cattle contract gap opened (153.025) higher and traded past the 50% retracement level (154.075) of the down move from the high of May 4th (163.50) to the low of May 11th (144.65) reaching 154.25. It couldn’t hold the rally and crashed to the low of the day at 148.10. This is just below the 21 DMA at 148.45. It bounced after the test of support and spent the remainder of the day consolidating between 150.625 and 148.925. It ended the session at 149.925. This is right at a key level (149.975) and will act as a pivot for Tuesday. A rally above this level could see a test of resistance at the 38.2 % retracement level at 151.85. A break above here could test resistance at 153.00. A break down from 149.975 could see attest of the Monday low. A break down from the low could see a test of trendline support at 146.30.
Lean Hogs
The June Lean Hogs continue to hang around resistance at 77.90, reaching a high at 78.25 and a low 0f 77.05. It ended the session near the low at 77.20. This is right at the 8 DMA (77.175)A break down from thje low could see a test of support at the 13 DMA (75.95) and then the April 3 high at 74.60. A rally above the high could see a test of resistance at 79.90.
For those interested I will hold a Weekly Livestock Webinar on Friday, May 19 at 2:30pm. It is free for anyone who wants to sign up and if you cannot attend live a recording will be sent to your email upon completion of the webinar. Sign Up Now.
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
[email protected]
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.