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Livestock Report


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Live Cattle

The stampede continues. The June Live Cattle contract made another new high for the move on Wednesday, May 3, 2017, trading up to 130.05, going limit up for the session. The limit will be expanded to 4.50 on Thursday for the Live Cattle markets. Cash continues to drive futures higher as the fedcattleexchange auction started the frenzy in the morning with sales of 547 head out of the 1745 offered. They traded at the cash lows of the day with an average of $140.15. They were sold in Texas. Nebraskas 142.00 minimum bids were ignored. Big mistake. Trades outside the auction started as aggressive $142.00 - $143.00 bids were rejected, forcing packers to bid $145.00 and higher. The winter storm (up to 20 inches of snow) over the weekend in Western Kansas had buyers worried about the ability to move cattle out of the affected areas. Kansas and Texas saw trades from $145.00 to $146.00. Nebraska had sales of $145.00 to $147.00 live and $230.00 to $232.00 dressed. Colorado had sales at $147.00. There were reports of $148.00 in Iowa. Iowa confirmed sales at $145.00. With futures prices under cash by $15 to $18 (normally $7 under at this time of year) and expanded limits for Thursday there could be more upside for the June contract. Live Cattle has had an aggressive move higher since making its low on April 5th at 108.675, at some point there will be profit taking. Watch out below! Boxed beef cutout values were strong today as Choice was up $3.14 to $232.59 and Select up $1.61 to $214.89. Choice/ Select spread at $17.70. Slaughter for Wednesday is estimated at 114,000.

Feeder Cattle

The August Feeder Cattle also had a limit up move. Feeder Cattle will also have expanded limits. The limit will go from 4.50 to 6.75 on Thursday. As long as the Live Cattle remain strong, I believe it would be difficult to see Feeders breakdown.

Lean Hogs

The June Lean Hogs grinded higher after breaking out above the 3 day consolidation between 74.475 and 72.825. Resistance is at 77.90 and then 80.00. Support at 74.475 and 72.875.

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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