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Livestock Levels


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Live Cattle

April Live Cattle rallied right from the open on Wednesday, March 8, 2017 as traders were anticipating bullish action on the fedcattleexchanges online auction. Price traded up to 117.15 ahead of the auction and then sped to the low of the day, trading down to 115.125 after a disappointing auction caused futures prices to retreat from the high. The auction saw a high trade of $124 in Kansas and no sales in Nebraska as the cattle had a reserve price of $127. After the auction packers bought some cattle at $125 in Texas and Kansas leading to a recovery in futures as the April contract made its way toward the high, reaching 116.75 before sellers took over and pressured price down at the close and April Live Cattle settled at 115.975. The rally towards resistance at 117.825 failed and price is between the 50 DMA (116.20) and the 21 DMA (115.15). A rally above the 50 DMA could lead to another test of resistance at 117.825 and then 119.40. A break below the 21 DMA puts 114.60 in play and then 112.65.

Feeder Cattle

April Feeder Cattle tracked the Live Cattles up and down price action, trading just above the 13 DMA (123.375) at 123.625 and just above yesterdays low (121.925) at 121.95. It remains in the middle of the 120.30 to 125.30 support and resistance levels. If April Feeder Cattle can breakdown below the Monday low (122.40), price may test the 120.30 support level. A rally above the 13 DA could lead to a test of resistance at the 100 DMA (124.325) and then 125.30. The short-term moving averages are intertwining (8, 13 and 21) and separation of these averages will give us a good indication of our next possible directional move.

Lean Hogs

April Lean Hogs inched higher after testing support at 67.90 during the early part of Wednesdays trading session, reaching 68.675 before stalling and drifting near the highs for the rest of the session. Resistance is at the 21 DMA (69.25) and 70.00. Support is at 67.90 and 66.575.

For those interested I hold a weekly livestock webinar on Friday, March 10 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.

Sign Up Now

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

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.



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About the author


Ben DiCostanzo
Senior Market Strategist
Walsh Trading

I began my career in the Securities industry working as a runner on the floor of the New York Stock Exchange while I attended Pace University. I then started working for Salomon Brothers in their Government Bond Trading arena. After graduating from Pace University with a degree in Accounting, I transferred to Chicago and became a member of the Chicago Mercantile Exchange utilizing my experience to execute trades and manage risk for institutional clients as a broker for Salomon Brothers on the trading floor. I then embarked to trade for my own account in the stock indices pits as a local before moving off the floor to aid and assist individual clients in their trading endeavors. I now work at Walsh Trading holding a series 3 broker’s license whose duties include being the firm’s Chief Market technician.

I understand that every client's needs are different, and I pride myself in tailoring my service to each client's unique circumstances and needs. Individual client experience, risk tolerance, and capital all play a role in how I approach the markets. I am involved in all markets using technical analysis to find opportunities. My approach is driven by the principles of capital preservation.

My trading philosophy is that if you can recognize and manage the risk, you have a better chance to be successful in trading. I advise clients to always use stops as money management in my opinion is the most important ingredient in trading commodities.

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