April Live Cattle held support at 128.10 for the second day in a row, making the low at the support level. It was a quiet trading session as the market traded to about the middle of Monday’s range and settled at 128.825. Cash traded on Monday at 205.00 on a dressed basis and 128.50 for live cattle. Volume is light and not enough for a market trend. The trade is steady with last week’s sales. Cutouts remain strong as choice rose 0.49 to 224.04 and select was up 0.58 to 217.79 on fairly good demand and moderate offerings. There were 115 loads. The choice /select spread narrowed to 6.25. Government reporting is now current with carcass weights and so far weights have declined in a normal manner which is contrary to market expectations. Carcass weights came in at 879#, which is 6 under last report and 2# under last year. It is 3.2# over the 5 year average of 875.8#s. The weather remains brutally cold and snow continues to fall, keeping cattle and people miserable. Hopefully, spring will arrive sooner rather than later. April Live cattle is consolidating between the 130.45 high and 128.00. I think April Live cattle could pull back to 123.00. A trade idea would be to buy one April Live cattle 125 put and sell 2 April 135 calls for even money plus commissions and fees.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 7th 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.