Live Cattle
The October Live Cattle contract was quiet most of the trading session on Tuesday August 1, 2017, trading in a tight range (112.725 – 11.55) most of the trading session. A late day rally took the October contract past the high, reaching 113.20 at the end of the session. This sets up a potential test of resistance at 113.80 for Wednesday’s session and breakout above here puts a test of the 200 DMA (115.00) in focus. The Feeder Cattle market set the tone for the cattle markets as they opened strong and grinded higher all day. The strength in the cattle futures markets on Tuesday could set a positive tone for the fedcattleexchange live cattle auction on Wednesday. The head count for the auction is very low, with only 1,063 head for sale. Last week’s auction traded between 117.50 and 118.25. The cash market ended up on a weak note, trading down to 117.00 on Friday. Trading started on Monday with some 115.00 trades taking place. Today’s rally could lend some support to the cash market. Support is at 110.80 and 108.675. Tuesday afternoon boxed beef cutout values were lower on Choice and higher on Select on light to moderate demand and offerings. Choice was down .34 at 205.41 with Select up 0.45 to close at 198.29 on 121 loads. The choice/ select spread narrowed to 7.12. The estimated cattle slaughter for Monday was reported at 119,000.
Feeder Cattle
The August Feeder Cattle contract opened on a strong note (146.90) and grinded higher early on Tuesday, testing resistance at 148.60, retracing back to the open price range, and then raced past the high (148.40) during the last 45 minutes of trading. It set a new high in the last 5 minutes of the day at 149.625, just below the 149.975 resistance level. A breakout from here could see a test of resistance at the 152.30 level. There is a gap just above the Tuesday high from 149.75 to 151.80. Support is at 148.30 and then 147.475.
Lean Hogs
The October Lean Hogs traded down past the 64.90 support level and closed on a weak note. It ended the session below support at 64.375. A break down below the Tuesday low (64.225) could send Hogs down toward the 61.80 support level. Resistance is at 64.90 and then 65.80.
For those interested I hold a weekly livestock webinar on Friday, August 4 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.
**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.