Live Cattle
The June Live Cattle contract down move stalled on Tuesday, March 27, 2018. It opened (105.325) above the 104.85 – 104.20 support zone, traded to the low of the day at 104.90 and then rallied above resistance (106.025) to the high of the day at 106.675. The high was reached in the last 10 minutes before settlement. The 1:00 pm settlement was punctuated by massive selling that took price (104.95) to within a couple of ticks of the low of the day. The 5 minute time period after settlement couldn’t generate any recovery and the day ended nearby at 105.275. All that work during the trading session to the high erased in one minute from 12:59 pm to 1:00 pm (CDT). Wow!! Even with the nice rally to the high, the candle formed was within Monday’s candle, this is an inside day candle. A breakout above the high or below the low could lead to the next move for Live Cattle. Trading below the Tuesday low could lead to a test of the lower end of the aforementioned support zone and then on to support at 103.00. Holding above the support zone could see a retest of the Tuesday high. A breakout above the high could lead to a test of resistance at 107.30 and then towards resistance at 108.65. On Tuesday negotiated cash trade was very limited on light demand in all major feeding regions. Tuesday afternoon boxed beef cutout values were steady on Choice and lower on Select on light to moderate demand and moderate offerings. Choice was down 0.17 at 222.36 with Select down 1.22 to close at 214.24 on 115 loads. The Choice/ Select spread widened to 8.12. The hide and offal value from typical fed cattle for today was estimated at 10.07 per cwt live, down 0.02 from Monday’s value. The estimated cattle slaughter on Tuesday was reported at 119,000. The Choice/ Select spread widened to 8.12.
Feeder Cattle
The May Feeder Cattle contract also formed an inside day candle and also was slammed during the last minute before settlement. The range was 135.425 low (made early in session) to the 137.875 high (made at end of session). It ended the day at 136.55. A break down from here could lead to a test of the low and taking out the low could lead to a test of support at 134.25. Support then comes in at 133.30. If price can rally above136.75, a move to the Tuesday high is possible. A breakout above the high could lead to a test of resistance at 138.95.Resistance then comes in at 140.775.
Lean Hogs
The June Lean Hogs contract consolidated around the 74.25 key level. It made the high just above it at 74.75 and the low just below it at 73.725. It ended the day near the low at 73.825. A break down from here could revisit the Friday low (73.225). Support then comes in at 72.875. A rally above the key level could see another attempt to trade to resistance at 75.625.
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.