Live Cattle
The December Live Cattle contract powered its way higher on Tuesday, October 24, 2017. It opened at 116.825, pulled back slightly to 116.575, just above the key pivot (116.55) level and then bulldozed its way through the October 13 high (117.575) on its way to the session high at 119.70. It ended the day above the 119.15 resistance level at 119.525. If price can follow through on Wednesday a test of resistance at 120.575 and then 121.325 is possible. An inability to follow through higher could lead to consolidation within the Tuesday range. The negotiated cash market was quiet on Tuesday. The fedcattleexchange.com auction is on Wednesday with a dwindling number of cattle for sale. It is still a time when we can see the picture packers are trying to paint as they act or don’t or don’t act on the minimum bids posted during the auction. Tuesday afternoon boxed beef cutout values higher on Choice and Select on moderate to fairly good demand and light to moderate offerings. Choice was up 0.88 to 200.13 and Select was up 1.64 to 192.69 on 133 loads. The choice/ select spread narrowed to a plus 7.44. The estimated cattle slaughter for Tuesday was reported at 117,000.
Feeder Cattle
The January Feeder Cattle contract opened (150.775) just below the Monday settlement price (150.875), dipped down to the session low at 150.075 and then took off, rallying all the way to 155.325, just shy of going limit up. It took out the 152.30, 153.50 and 154.25 resistance levels on its way up to the high. These levels now become support. A continuation higher will test resistance at 156.20 and then trendline resistance at 156.70. Besting this area could lead to a run to the 159.975 resistance level. If the 156.20 – 156.70 area is too tough to overcome the consolidation within the Tuesday range and the aforementioned support levels is possible.
Lean Hogs
The December Lean Hogs contract opened (63.50) at the Tuesday low (63.45) and dipped down towards the rising 13 DMA (62.85) making the session low at 62.95. It found support here, traded above the 63.325 support level and rallied to the high of the day at 64.375. Breaking down from the 63.325 support level could see the rising 13 DMA and trendline (62.90) tested. Support then comes in at the 50 DMA (62.025) and 61.80. A rally above the high could see price revisit resistance at 64.80 and then 66.50.
For those interested I hold a weekly livestock webinar on Thursday, October 26 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.