Live Cattle
The April Live Cattle contract gap opened (123.00) higher on Wednesday, March 14, 2018. It blew past resistance at 123.125 and rallied to the high of the day at 124.30, just below resistance at 124.70. The high is right at the declining 21 DMA (124.20) and this level prevented price from moving closer to the higher level of resistance. The rally faltered, and then broke down to the low for the day at 122.775. It ended the day at the 123.125 resistance level. It formed a shooting star candlestick, with a long upper shadow. a small body and in this case, a short lower shadow. With the rally failing at resistance this candle could be considered bearish. If price opens and trades lower on Thursday morning, it will important for price to hold the Tuesday high (122.575), as this is the lower part of the gap that was created with the Wednesday trade. The rising 100 DMA (122.45) is nearby and a breakdown below here could send price to trendline support at 122.025. A breakdown from the trendline could lead to a test of support at 121.325 and then 120.50. If price can stay above the 100 DMA and rally past 123.125, then a retest of the 21 DMA is possible and then the 124.70 resistance level. Resistance then comes in at 125.50. The negotiated cash trade is light on light to moderate demand in the Western Cornbelt with dressed sales at 207.00. Wednesday afternoon boxed beef cutout values were firm on Choice and Select on light to moderate demand and offerings. Choice was up 0.38 to 224.11 and Select was up 0.26 at 217.01 on 123 loads. The choice/ select spread widened to 7.10. The estimated cattle slaughter for Wednesday was reported at 117,000.
Feeder Cattle
The April Feeder Cattle contract opened (143.225) higher, pulled back to 142.525 and then raced to the high of the day at 144.85, just below resistance at 145.05. Feeders also couldn’t sustain the rally and price came tumbling down, trading to the low of the day at 142.35. It consolidated near the low and ended the day nearby at 142.70. It also formed a shooting star candlestick. A breakdown from 142.35 could see price revisit the Tuesday low (141.025) and then support at 140.775. A rally above 143.50 could see price retest resistance at 144.70 and then the 145.05 level.
Lean Hogs
The April Lean Hogs contract is still within the consolidation range from the February 28th high at 69.50 to the 66.425 low. On Wednesday, price broke down after a mid-morning test of resistance at 67.80, trading to the low of the day at 66.625. It ended the day at 66.85. A break down below 66.425 could lead to a test of support at 64.80. Holding above support could lead to another rally to the middle of the consolidation band and resistance at 67.80.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 15th at 3:00 pm. 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.