Live Cattle
The December Live Cattle contract opened lower and tested the 13 DMA (113.05) support level on Tuesday, October 3.2017, reaching the session low at 112.90. The 13 DMA contained the selling pressure and price recovered sharply, trading up to the 200 DMA (115.575) this morning, reaching the session high at 115.725 before failing and breaking down on Monday, October 2, 2017, reaching a high at 115.475. It ended the session at 114.925. It formed a piercing line candlestick pattern and could lead to higher prices on Wednesday. Trading above the 200 DMA could lead to a test of resistance at 116.55. Resistance then comes in at the September 22 high at 117.725. Support is at the 100 DMA (114.425) and then the 13 DMA. The negotiated cash market was quiet. The fedcattleexchange.com auction is on Wednesday with 1,732 head for sale. Tuesday afternoon boxed beef cutout values were higher on Choice and Select on light to moderate demand and light offerings. Choice was up 0.65 to 197.87 and Select up 0.74 to 189.02 on 114 loads. The choice/ select spread narrowed to a plus 8.85. The estimated cattle slaughter for Tuesday was reported at 119,000.
Feeder Cattle
The November Feeder Cattle rallied strongly through the 152.30 level, nearly taking out the Monday high (154.775), but stopped just below it at 154.75. It ended the day at 154.30. It formed an inside candle and breaking above the Tuesday high could lead to a test of the September 29 high (155.55) and then resistance at 156.025. Ressistance then comes in at 159.975.Support for Wednesday is at 153.60 (8 DMA), 152.30 and the rising 21 DMA (151.275).
Lean Hogs
The December Lean Hogs contract traded up to the 63.325 resistance level, reaching a high 63.45. It couldn’t sustain the rally and traded down to the lower middle of the trading range forming a Doji candlestick. The Doji indicates indecision and a break down from the 61.80 support level could lead to a test of support at the 21 DMA (60.125) and the trendline at 59.975. Taking out the high could lead to a test of resistance at 64.90.
For those interested I hold a weekly livestock webinar on Friday, October 6 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.