Live Cattle
The June Live Cattle contract is now the lead contract as the volume is greater here than in April. June made another new low for the down move, trading to a low of 108.90 on Tuesday, March 20, 2018. It ended the day nearby at 109.05. It ended the day below trendline support (109.25) and above the 108.65 support level. This area is my key for Wednesday’s trading session. A failure from this area could lead to a breakdown towards support at 106.025. Getting above the trendline could lead to a test of resistance at 110.80. The negotiated cash trade quiet in all major feeding regions. Tuesday afternoon boxed beef cutout values were weak to lower on Choice and Select on light to moderate demand and moderate offerings. Choice was down 1.52 to 223.35 and Select was down 0.55 at 216.74 on 134 loads. The choice/ select spread narrowed to .61. The estimated cattle slaughter for Tuesday was reported at 118,000.
Feeder Cattle
The April Feeder Cattle contract tested support at 136.75, making the session low just above it at 136.825. It was able to bounce off support and trade up to the high of the day at 138.925 which is just below resistance at 138.95. It couldn’t hold this level and broke down at the end of the session trading to 137.225 and ending the day at 137.50. This keeps the 136.75 level in jeopardy and breaking below here could see price test the 134.25 support level. A bounce from support could see the 138.95 level retested and a breakout above here could move towards resistance at 140.775.
Lean Hogs
The June Lean Hogs contract has moved into position as the front contract. It had more volume than the April contract so I will be speaking about The June contract from here on out. The June Lean hogs traded to the session low at 76.15 which is just below support at 76.225. It recovered and rallied to the high at 77.10. It broke down and ended the session at 76.475. The high was just below resistance at 77.80. A rally above the Tuesday high could test resistance at 77.80 and then 78.425. Resistance then comes in at 79.775. A breakdown below the Tuesday low could see price test support at 75.625 and then 74.125.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 22nd 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.