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Livestock Report


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Live Cattle

The October Live Cattle contract tried to rally on Wednesday, August 16, 2017, trading up to 109.70 mid-morning before breaking down to the session lows at 108.075. This is just below the 108.675 support level and a small bounce had the October contract end the day at 108.525. A rally above 108.675 could lead to a test of the Wednesday high. Resistance is at 110.80. A breakdown from the session low could see a test support at 107.30 and then the 106.00 support level. The negotiated cash market traded at 111.00 for live cattle and 175.00 – 177.00 for dressed on Tuesday. The fedcattleexchange auction was held on Wednesday morning with 1,164 head for sale. There weren’t any official sales during the auction as producers passed on the minimum bid levels. There was one actual sale at 112.00, but that was passed over by the producer. Wednesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and heavy offerings. Choice was down 1.44 at 197.51 and Select down 0.83 to 195.04 on 201 loads. The choice/ select spread widened to 2.47. The estimated cattle slaughter for Wednesday was reported at 115,000.

Feeder Cattle

The September Feeder Cattle contract couldnt take advantage of Tuesdays strong rally. It failed to get above the 100 DMA (146.75) as the session high was 146.725. The failure led to a breakdown the nearly erased Tuesdays big rally. It broke down below support (143.50), making the session low at 142.95 and ending the day at 143.075. A breakdown below 142.95 could see a test of the lows down at 140.75. A recovery from 143.50 could see a retest of the 146.025 resistance level.

Lean Hogs

The October Lean Hogs contract failed to break out above the 71.30 resistance level. It pierced it with the session high price of 71.325, but couldnt build momentum and trade to the next resistance level (72.875). It failed and broke down to test the 67.90 support level. The session low was 67.95. Pork belly prices collapsed as it was down 13.59 to 182.54. Pork Belly demand has been a key driver for the Lean Hogs and a continued break down in price could lead to a pullback in the futures market. Trading below the 67.90 support level could lead to a test of support at 66.75 and the 64.90.

For those interested I hold a weekly livestock webinar on Thursday, August 17 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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