Live Cattle
The December Live Cattle contract consolidated on Monday, October 16, 2017. It formed a doji candlestick while testing support at the 116.55 level, making the low at 116.525. It made the high at 117.525, just above the 8 DMA (117.40). It ended the session in between at 117.10. A breakdown below 116.55 could lead to a test of support at the 200 DMA (115.625) and then 114.25. A break out above the 8 DMA could lead to a test of the 119.15 resistance level. The negotiated cash market was quiet. Monday afternoon boxed beef cutout values were higher on Choice and Select on moderate demand and light offerings. Choice was up 0.59 to 198.81 and Select was up 0.52 to 190.57 on 97 loads. The choice/ select spread widened to a plus 8.24. The estimated cattle slaughter for Monday was reported at 110,000.
Feeder Cattle
The November Feeder Cattle also consolidated on Monday, trading below the156.025 resistance level and above the 154.25 support level. The session range was 155.70 for the high and 154.375 for the low. It ended the day at 155.025. Taking out the 156.025 resistance level could see price test resistance at 157.30 and then 159.975. Breaking down from the session low could see price test support at 153.50 and then 152.30.
Lean Hogs
The December Lean Hogs contract opened (62.50) just below the 50 DMA (62.575) and dipped to the session low (62.30) before grinding its way higher and taking out the 63.325 resistance level. It broke out to a new high at 63.875 and ended the day nearby at 63.825. 64.80 is the next level of resistance and a break out above here could see price test the 66.55 resistance level. A break down from the high could lead to a test of support at the 50 DMA and then 61.80.
For those interested I hold a weekly livestock webinar on Friday, October 20 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.