Live Cattle
The June Live Cattle contract made another new low for the down move, trading to a low of 106.00 on Friday, March 23, 2018. It is right at the 106.025 support level and could be the key to trade on Monday. A break down below support and price could test the 104.85 – 104.20 support area. Support then comes in at 103.00. If support holds a rally towards resistance at 108.65 is possible. Negotiated cash trade on Friday was at a standstill in all major feeding regions. The Cattle on Feed report showed cattle on feed March 1st at 109 percent, February placements at 107 percent and February marketings at 102 percent. Friday afternoon boxed beef cutout values were lower on light to moderate demand and moderate offerings. Choice was down 2.12 at 223.09 with Select down 1.62 to close at 216.40 on 109 loads. The choice/ select spread narrowed to 6.69. The hide and offal value from typical fed cattle for today was estimated at 10.09 per cwt live, down 0.01 from Thursday’s value. The estimated cattle slaughter for Friday was reported at 108,000 with 26,000 head on Saturday for a week to date estimate of 607,000.
Feeder Cattle
The May Feeder Cattle contract is now the lead contract as the volume in May is greater than in the April contract. May Feeder’s broke down early and tested the 136.75 support level, making the low at 136.425. Support held and a sharp rally to the high of the day at 138.95 followed, which was right at resistance (138.95). Feeders broke down from here and ended the session at 137.30. A break down from here could lead to a test of support at 135.60 and then134.25. Support then comes in at 133.30. Trading above 138.00 could lead to a retest of resistance at 138.95 and then 140.775.
Lean Hogs
The June Lean Hogs contract gap opened (74.325) lower and broke down towards the 72.875 support level. It made the session low at 73.225 and then a short-covering rally took price up as it closed the gap (Thursday low – 74.90) on its way to the session high at 75.575. This was just below resistance at 75.625. It broke down from here, trading to 73.85 and it ended the day at 74.125. This right at the key (74.125) level and a failure from here could see price test the Friday low and then support. A recovery from here could take price up to resistance.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 29th 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.