Live Cattle
The August Live Cattle grinded lower into the fedcattleexchange auction and then took off to the upside as a better than expected auction led to more aggressive cash purchases. The fedcattleexchange auction had 2,665 head for sale with 1,907 sold. The prices ranged from 117.00 to 118.75. The higher than 118 trades seemed to spur the futures higher and then reports of cash bids coming in at 118 and then 120 propelled futures to trade up limit by 11:20 AM, where it stayed for the remainder of the session. Cash then traded at 120 in most areas and we could see futures stronger early on Thursday. The 100 DMA is at 118.125 and is the lid containing the price action. We ended Wednesday’s session at 117.875 and a stronger open above the 100 DMA could lead to short covering and a test of trendline resistance at 119.575 and then the 50 DMA at 120.775. The limit for Live Cattle is expanded on Thursday to $4.50. Support is at 116.375 and then 115.825. Boxed beef cutout values were lower Wednesday afternoon on light to moderate demand and heavy offerings. Choice cutouts were down $2.55 to $212.69 and select down $1.78 to $198.78 on 187 loads. The choice/ select spread is at $13.96. Tuesday’s estimated slaughter is 118,000, lower than last week’s 119,000 and above last year’s 114,000.
Feeder Cattle
The August Feeder Cattle contract also traded up limit and will have expanded limits to $6.75. A rally above resistance at 152.30 could see price test resistance at 153.70 and then 154.25. Panic buying could take price to resistance at 156.025. Support is at 149.975 and then trendline support is at 146.75.
Lean Hogs
The August Lean Hogs remain locked between resistance at 83.80 and support at 82.375. A breakout above resistance could see price test 84.825. A breakdown below support could lead to a test 81.475 and then 80.45.
For those interested I hold a weekly livestock webinar on Friday, July 14 at 3:00pm. 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.