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Livestock Levels


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Live Cattle

The June Live Cattle contract made another new high for the move on Monday, May 1, 2017, trading up to 125.325 before breaking down and trading to the low of the day at 123.65. A late day rally took price above 124.00 and it ended the session at 124.30. It settled at 124.125. Todays trade formed a Spinning Top Candle, a bearish indication especially with the strong rally in Live Cattle. If the June Live Cattle trades below the Monday low on Tuesday, we may see a pullback to support at 122.425 and then 121.45. If the bearish candle fails to contain the bullish sentiment and we take out the Monday high, a test of resistance at 125.90 and then 127.15 is possible. Boxed beef cutout values were higher as Choice was up $4.49 to $226.27 and Select was up $1.77 to $209.45. The estimated slaughter for Monday is 107,000.

Feeder Cattle

The August Feeder Cattle also had an early rally that failed. It traded up to 156.50, just above resistance at 156.025 before dropping to the low of the day at 152.675. It staged a late day rally and ended the session at 153.925. It settled at 153.75. A bearish spinning top candle formed and could lead to a test of support. A breakdown from the low could lead to a test of support at 151.025 and then the August 2016 high at 149.975. A continuation higher on Tuesday could see a retest of resistance at 156.025 and then 159.70.

Lean Hogs

The June Lean Hogs consolidated around the 74.10 resistance level, reaching 74.30 and the 72.875 support level, trading down to a low just above it at 73.025. This is the second day in a row in this range. A breakdown from the 72.875 support level could lead to a test of support at the 8 (71.125), 13 (71.325), 21 (71.975) and 50 DMAs ( 70.875) and then 70.00. A rally above the high could see a test of resistance at 75.325 and 77.90.

For those interested I hold a weekly livestock webinar on Friday, May 5 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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