Live Cattle
April Live Cattle rallied right from the open on Wednesday, March 8, 2017 as traders were anticipating bullish action on the fedcattleexchange’s online auction. Price traded up to 117.15 ahead of the auction and then sped to the low of the day, trading down to 115.125 after a disappointing auction caused futures prices to retreat from the high. The auction saw a high trade of $124 in Kansas and no sales in Nebraska as the cattle had a reserve price of $127. After the auction packers bought some cattle at $125 in Texas and Kansas leading to a recovery in futures as the April contract made its way toward the high, reaching 116.75 before sellers took over and pressured price down at the close and April Live Cattle settled at 115.975. The rally towards resistance at 117.825 failed and price is between the 50 DMA (116.20) and the 21 DMA (115.15). A rally above the 50 DMA could lead to another test of resistance at 117.825 and then 119.40. A break below the 21 DMA puts 114.60 in play and then 112.65.
Feeder Cattle
April Feeder Cattle tracked the Live Cattle’s up and down price action, trading just above the 13 DMA (123.375) at 123.625 and just above yesterday’s low (121.925) at 121.95. It remains in the middle of the 120.30 to 125.30 support and resistance levels. If April Feeder Cattle can breakdown below the Monday low (122.40), price may test the 120.30 support level. A rally above the 13 DA could lead to a test of resistance at the 100 DMA (124.325) and then 125.30. The short-term moving averages are intertwining (8, 13 and 21) and separation of these averages will give us a good indication of our next possible directional move.
Lean Hogs
April Lean Hogs inched higher after testing support at 67.90 during the early part of Wednesday’s trading session, reaching 68.675 before stalling and drifting near the highs for the rest of the session. Resistance is at the 21 DMA (69.25) and 70.00. Support is at 67.90 and 66.575.
For those interested I hold a weekly livestock webinar on Friday, March 10 at 3:00pm. 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.
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.