The June Live Cattle market traded above the 124.30 resistance level early in the trading session, reaching the session high and a new high for up move at 124.90 before tumbling and breaking down to the low at 122.55. The low breached support at 122.825 and then recovered and settled at 123.50. It formed an outside candle as the range was greater than yesterday’s range. It settled below the 100 DMA (123.808) on the continuous chart after closing above it yesterday. With the lower close the outside candle leans to the bearish side and a short-term top could be in place for the June Live Cattle. A breakdown below the Friday low could lead to a test of support at 121.90 and then 120.75. Support then comes in at 119.15. If it recovers and stays above the 100 DMA, resistance remains at 124.30 and then 125.80.
The negotiated cash market has once again been quiet. It traded earlier in the week at 130.00 on a live basis in Iowa. It traded at 128.00 today in Texas, Kansas and Nebraska and some at 208.00 on a dressed basis in Nebraska and Iowa. Volume has been light. The 128.00 trades were disappointing as many were expecting (hoping) for a solid number at 130.00. This, along with a bearish (in my opinion) cattle on feed report could set the stage for a retracement in June Cattle. The report showed placements up 2% against expectations for a decline of 4%. On feed showed up 1% against expectations of a decline of .3% and marketings were slightly above last year. Boxed beef cutouts declined 0.22 to 229.09 for choice and rose 0.27 for select to 218.64. There was moderate demand and offerings. The load count was light at only 72 loads and the choice/ select spread narrowed to 10.45. Slaughter came in at 113,000 for Friday and the estimate for Saturday is for 42,000. This would bring the total for the week to 631,000, well over last week’s 597,000 and above last year’s 611,000.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 28st 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.