Live Cattle
The December Live Cattle contract made a weak attempt at a rally at the open on Monday, November 6, 2017.It failed at the session high (127.675), in the middle of the resistance zone from 127.15 to 128.30 and below the Thursday high (127.875). It broke down below support at 125.55 and made its way towards the 124.70 support level, making the low just above it at 124.825. The 124.70 support level and the rising 8 DMA (124.25) will be the key support levels for Tuesday’s trade, in my opinion. Pressure below here could lead to a run down to support at 123.125. Breaking out above 125.55 could lead to a test of the Wednesday low (126.00) and then a move towards the 127.15 resistance level. The negotiated cash market was quiet on Monday. Monday afternoon boxed beef cutout values were higher on Choice and Select on light to moderate demand and moderate offerings. Choice was up 1.83 to 210.57 and Select was up 1.69 to 194.77 on 113 loads. The choice/ select spread widened to a plus 13.68. The estimated cattle slaughter for Monday was reported at 117,000.
Feeder Cattle
The January Feeder Cattle contract broke down below the 159.975 support level, trading down to the low at 159.275. It recovered from here and overtook the 159.975 level and ended the session at 160.90. This is right at the June 6 (160.90) high and will be the level to key off of on Tuesday, in my opinion. Rebounding from here could lead to a test of the Thursday high (162.075). A continuation higher could lead to a test of resistance at the May 4th high (163.50). A pullback from here could lead to a retest of the 159.975 support level. Selling pressure could then lead to a test of support at 158.10.
Lean Hogs
The December Lean Hogs contract broke down below the 64.80 support level on Monday, trading down to a low of 64.425 before recovering and ending the session just below support at 64.775. The 64.80 resistance level will be the pivot for trading on Tuesday, in my opinion. Trading and staying above this level could lead to a test of the 13 DMA (65.125) and a break out above here could lead to a test of the 8 DMA (65.65). Trading below the 64.80 level could lead to a test of support at 63.325.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, November 9 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.