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Livestock Rerport


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Live Cattle

The August Live Cattle made an early attempt to rally and recover some of Tuesdays late day losses on Wednesday, June 7, 2017. It made its high for the day at 124.925 right around the time the fedcattleexchange auction was to take place. The auction was postponed however, to Thursday as technical glitches with their website occurred. They updated the website and as usual with updates caused problems for users. Outside of the auction, there were some cash trades at $135.00 in Nebraska. All other regions were quiet. Boxed beef cutout values were firm on moderate to fairly good demand and moderate offerings. Choice cutouts were up $0.26 to $250.71 and select up $0.33 to $219.90 on 146 loads. The choice/ select spread is at $30.81. Wednesdays estimated slaughter is 116,000, even with a week ago and above last years 111,000. Thursday could be an interesting day with the auction and possible cash trading outside the auction. A steady to higher cash trade could lead to a rally in the futures market; a lower cash trade could send futures lower as the large long position in the market could get rattled. A rally above the Wednesday high could lead to a test of resistance at 125.75 and then 127.45. Support is at 123.525 and then 121.45.

Feeder Cattle

The August Feeder Cattle contract made an early attempt to trade past resistance at 156.025, reaching a high of 156.25 before reversing course with a late session collapse as it traded all the way down to support at 151.85. It traded down to the low of the day at 151.70, and found support here as it once again reversed course and made a run to upside. It traded just past resistance, reaching 156.05 and then dropping back and ended the session at 155.80. Feeder Cattle formed a hammer candlestick and a rally above the high could lead to a test of resistance at 158.80 and 159.70. A breakdown below the 8 DMA (154.775) could lead to a test of support at the 13 DMA (153.45) and then the support area by the 21DMA (151.975) and 151.85 (38.2% retracement level).

Lean Hogs

The July Lean Hogs had a fairly quiet choppy trading session as it traded within Tuesdays trading range and formed a Doji candlestick. The low (80.75) is just above support at 80.45 and the high is below resistance (82.375). The past 4 trading sessions have been around this trading zone (June 2 high at 82.675 and June 6 low at 80.25). A trade above or below this range could lead to our next directional move. If July Hogs break down below the Tuesday low we could test lower levels of support. The 21 DMA is at 79.875. Support then comes in at 77.90. If it rallies past the Friday high, a test of resistance at 83.80 is possible.

For those interested I hold a weekly livestock webinar on Friday, June 9 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

**Call me for a free consultation for a marketing plan regarding your livestock needs.* *

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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