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Live Cattle


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April Live Cattle shook off Tuesday’s weak close with a rally right from the opening of Wednesday’s trading session. Anticipating a strong fedcattleexchange auction, traders followed last Wednesday’s script and rallied price into the 10 AM CT auction. This week, however, the auction didn’t disappoint as buyers were aggressive in their pursuit of cattle. Cattle auctioned from Texas traded from a low of $125.00 to a high of $128.25. Kansas cattle traded from $125.00 to $128.00. Nebraska cattle traded from $127.00 to 131.50. Futures rallied until the auction ended, reaching the high of the day during the auction at 118.075. Price went sideways for the remainder of the session, trading between a low of 117.40 and a high of 117.85. It ended the session at 117.65, once again below resistance at 117.825. Even with a strong auction and a strong cash trade after the auction, Futures couldn’t close above resistance. Futures also stayed below the 118.70 trendine resistance on the rally to the high. Cash traded at $132.00 live, and $210.00 dressed in Iowa/ Minnesota, $131.00 - $131.50 live, and $210.00 dressed in Nebraska. Texas and Kansas traded between $127.00 and $128.00. Wednesday afternoon boxed beef cutout values were higher on Choice and lower on Select on light to moderate demand and light offerings. Choice was up 1.18 at 221.32 with Select down .75 to settle at 213.14. Futures are trapped between support (Wednesday low – 116.20) at 8 DMA (116.475) and the 117.825 and 118.70 resistance levels. If trendline resistance (118.70) is taken out a test of the January 20 high (119.875) is possible, then the January high at 121.45 becomes the focal point. Continued strength could push price towards resistance at 124.675.A break down below support and could lead to a test of trendline support at 114.70 and then the 21 (113.375) and 50 (112.375) WMAs.

For those interested I hold a weekly livestock webinar on Friday, March 17 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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