Live Cattle
The October Live Cattle contract rallied from the open on Thursday, September 7, 2017. It pushed past resistance at the short-term moving averages (the 8 DMA (105.85), 13 DMA (106.15) and the 21 DMA (106.575)) and rallied to trendline resistance at 107.45 reaching a high of 107.675. It failed from the trendline and fell back below the 21 DMA by the end of the session (106.525). Trendline resistance comes in at 107.175 for Friday and the 21 DMA should be lower. A rally above these two resistance levels could lead to a test of resistance at 108.675. A failure from the 21 DMA has the shorter moving averages as weak support and then 104.875. The negotiated cash market was quiet. Thursday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and moderate offerings. Choice was down 0.80 to 192.13 and Select down 0.51 to 190.16 on 152 loads. The choice/ select spread narrowed to 1.97. The estimated cattle slaughter for Wednesday was reported at 117,000.
Feeder Cattle
The October Feeder Cattle gap opened higher and rallied past the 146.20 resistance level to a high of 147.325. It pulled back to the 146.20 support area, ending the day at 146.275. The 50 DMA is at 146.375 and there is a trendline at 146.45 for Friday’s trading session. A rally above these levels could see a retest of the Thursday high and a rally from here could see the rising 100 DMA (148.075) tested. Resistance then comes in at 149.975A failure from 146.20 could see the Thursday low tested (144.20). Breaking down from here could see the 143.50 support level tested. Support then comes in at the September 5th low at 142.05.
Lean Hogs
The October Lean Hogs contract gap opened lower and crashed, trading through the Tuesday low (61.875) and the 61.80 support level. It made the session low at 61.325 and ended the day at 61.50, just below support. A continued break down on Friday could see trendline support tested at 60.275 and then the August 29 low at 59.825. A reversal higher through 61.80 could see resistance tested at 62.575 and 63.25 (Wednesday’s low).
For those interested I hold a weekly livestock webinar on Friday, September 8 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.