Live Cattle
The February Live Cattle tested support at the 200 (117.10) and the 100 (116.925) DMAs, making a new low for the down move at 116.70 on Tuesday, January 9, 2018. Price once again respected these support levels and by the end of the session was testing the session high (118.00), reaching 117.975 and ending the day at 117.95. A breakout on Wednesday above the Tuesday high could see price retest the 119.15 resistance level. A failure from 118.00 could see another test of the moving averages. The negotiated cash trade saw trading in Nebraska at 192.00 for dressed, with 2,000 reported sold and 7,500 estimated. Tuesday afternoon boxed beef cutout values were higher on Choice and Select on light to moderate demand and moderate offerings. Choice was up 0.29 to 210.49 and Select was up 0.32 to 203.69 on 117 loads. The choice/ select spread narrowed to a plus 6.80. The estimated cattle slaughter for Tuesday was reported at 118,000.
Feeder Cattle
The March Feeder Cattle contract tested support at 140.775, making the low of the day below it at 140.125 a new low for the down move. It was able to recover and rallied the remainder of the day, trading past the Tuesday high (142.375) and approached trendline resistance at 143.175, reaching a high just below it at 143.05. It formed an outside day up candle and could lead to a test of resistance at the declining 21 DMA (144.025) on a breakout above the Tuesday high. Resistance then comes in at 145.05. A break down from the Tuesday high could see price revisit support at 140.775. Support then comes in at 138.95.
Lean Hogs
The February Lean Hogs contract made a new high for the up move, reaching 73.45 before pulling back and trading down to the low of the day at 72.45. It recovered and tested (73.35) the high. It fell back and ended the session at 73.125. A breakout above the Tuesday high could lead to a test of resistance at 74.225 and then 75.70. A pullback from 72.85 could lead to a test of support at the rising 8 DMA now at 71.725.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, January 11th, 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.