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Livestock Report


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Live Cattle

The August Live Cattle contract remains trapped between the 100 DMA (118.175) and the 200 DMA (114.30). It opened (117.20) just above Mondays settlement price (116.95) on Tuesday, July 18, 2017 and traded down to the low of the day at 114.775. It spent the remainder of the day consolidating in the lower end of the range (115.45 to 114.80). This is just above the 200 DMA and this should be the key level for Wednesday. Finding support art the 200 DMA could see price revisit the short-term moving averages (the 8, 13 and 21DMAs) which will be a short-term resistance area (116.05 to 116.325). Trading above here could see a retest of the 100 DMA. A breakdown below the 200 DMA could lead to a test of the July 6th low at 112.425. The negotiated cash trade was inactive today on light demand in all feeding regions. Boxed beef cutout values were lower Tuesday afternoon on light to moderate demand and moderate to heavy offerings. Choice cutouts were down $1.00 to $208.05 and select down $.56 to $195.25 on 158 loads. The choice/ select spread is at $12.80. Tuesdays estimated slaughter is 120,000, the same as last weeks 120,000 and above last years 113,000. The fedcattleexchange online auction is on Wednesday morning at 10 AM CT. There is 2,912 head for sale and this could get the negotiated cash trade moving forward.

Feeder Cattle

The August Feeder Cattle contract was hit pretty hard on Tuesday, dropping right from the open (153.85), high of day (153.90), to the low of the day at 150.525. It range traded between 150.65 and 152.05 for the rest of the session. It ended the session at 151.30. The low is right near support at 149.975 and a breakdown below here could lead to a test of support at the 21 DMA at 147.625. A rebound from Wednesdays low could see a test of resistance up at 152.30 and then 154.25,

Lean Hogs

The August Lean Hogs big breakdown on Friday has led to a battle at the 80.45 support level. Price has not been able to stay below this level and Wednesdays session ended just above it at 80.475. A breakdown below support could lead to a test of support at 77.90. A rally from support could see a retest of resistance at the 21 DMA (81.475) and then 82.375.

For those interested I hold a weekly livestock webinar on Friday, July 21 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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