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Livestock Rerport


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Live Cattle

The June Live Cattle contract rallied from the open on Wednesday, May 17, 2017, trading to the high of the day at 123.45. The rally came on the better than hoped for fedcattleexchange.com auction as it traded between 133.75 and 135.75. It also traded at 130.00 and 131.00 for 17 to 30 day delivery. There were 2,379 head offered and 1,621 traded. The futures market then made an about face and broke down to the low of the day at 121.75. There wasnt any cash reported after the auction and futures responded by making the new low. The June contract rallied into the close and the session formed a spinning top candlestick. That is 2 days of small bodied candles which could set up the next directional move. The June contracted ended the session right on trendline support and tomorrows trade will see the trendline up at 123.10. A rally off the trendline could see futures test resistance at 124.65 and then 125.75. A failure from here could see a revisit of the Wednesday low and then the Tuesday low at 120.575. The USDA reported some live cash trades at 136 in Nebraska and dressed at 210 to 215 in Iowa and Nebraska.

Feeder Cattle

The August Feeder Cattle contract made an early attempt to rally and it reached the high (149.35) of the day during the first 5 minutes of trading before breaking down and testing trendline support (146.80) at 146.875. Feeders rebounded from here and rallied to 148.775. The market failed from here and broke down to the low of the day at 146.45. It couldnt stay below the trendline and made another attempt to rally reaching 148.475. It ended the session at 148.05, forming a Doji candlestick, showing indecision in the market. That is 2 days of bouncing off of trendline support and forming 2 small bodied candles in a row. The trendline rises to 147.325 on Thursday and a breakdown from the trendline could see price test support at 144.65 and the 143.325. A rally from the high could see price test resistance at 150.425 and then 151.85.

Lean Hogs

The June Lean Hogs rallied to resistance at 79.90, reaching 79.95 for the high of the day. Lean Hogs couldnt hold this level and broke down to the low (78.80) of the day. It formed a hanging man candlestick and a breakdown from here could lead to a test of support at 77.90 and then 76.775. A rally off the low could see a retest of the high and then a move towards resistance at 82.30.

For those interested I hold a weekly livestock webinar on Friday, May 19 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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