Live Cattle
The April Live Cattle contract opened higher (123.325) and ran up to the high of the day (124.825) on Tuesday, March 6, 2018, testing resistance at 124.70 before failing and breaking down to the low (122.45) of the day. It ended the session at 122.80. A break down below the Tuesday low could see the rising 100 DMA (122.125) tested and then support ten at 121.325. A recovery above the rising 50 DMA (123.025) could lead to a retest of resistance at 124.70. The negotiated cash trade was very limited on light demand in all major feeding regions. Tuesday afternoon boxed beef cutout values were steady to firm on Choice and Select on light to moderate demand and offerings. Choice was up 0.12 to 223.35 and Select was up 0.36 to 215.20 on 105 loads. The choice/ select spread narrowed to 8.15. The estimated cattle slaughter for Tuesday was reported at 115,000.
Feeder Cattle
The April Feeder Cattle contract also opened (147.175) higher and rallied to the high (148.48) of the day. It neared trendline resistance at 148.65 and then broke down to its low at 145.775. The break down tested support at the 50 DMA (145.875) and it ended the session at just above it at 146.075. A break down below the 50 DMA could lead to a test of support at 145.05 and then 144.20. Support then comes in at 143.50. Holding above the 50 DMA could see price test resistance at 147.35 and then the declining trendline now at 148.525 for Wednesday’s trade.
Lean Hogs
The April Lean Hogs contract opened (69.275) higher, consolidated in a tight range (68.60 low) and traded up to the high (69.325) of the day. It traded down to the low of the day (68.125) at the end of the session and it ended the day nearby at 68.15. The high of the day was right at strong resistance. It was just above the 13 DMA (69.125) and below trendline resistance (69.55) and the declining 21(69.575) and 200 (69.85) DMAs. The breakdown at the end of the day took price below the declining 8 DMA (68.75) and rising 100 DMA (68.60). It ended the day below the 100 DMA and continued weakness below here could see price test support at 67.80 and then the declining trendline at 66.75. A rebound from the low would test resistance at the moving averages.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 8th at 2:30pm. 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.