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Livestock Report


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Live Cattle

The October Live Cattle contract rallied on Tuesday, August 22, 2017, breaking out above Mondays inside candle and trading to resistance at the 13 DMA (108.225). The high of the day was 108.325 and the market pulled back from here, ending the session at 107.65. Resistance remains at the 13 DMA and then 108.675. A rally above the Tuesday high could lead to a test of resistance at 110.80. A breakdown from the 8 DMA (107.125) could lead to a test of the 106.00 support level. The negotiated cash market was quiet on Tuesday. The fedcattleexchange auction is to be held on Wednesday morning with 1,067 head for sale. Tuesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and moderate offerings. Choice was down 0.06 at 193.03 and Select down 0.73 to 190.89 on 137 loads. The choice/ select spread widened to 2.14. The estimated cattle slaughter for Wednesday was reported at 118,000.

Feeder Cattle

The September Feeder Cattle rallied off the 138.95 support level. It staged a strong rally as it surpassed the 8 DMA (142.00), reaching a high of 142.55. It ended the session just below the 8 DMA at 141.975. Breaking above the Tuesday high could lead to a test of resistance at 143.50. Resistance then comes in at 144.65. A pullback from the 8 DMA could lead to a test of support at 140.75, 139.90 and then 138.95.

Lean Hogs

The October Lean Hogs contract broke down below the 64.90 support level. It traded to a low of 63.35 and ended the session just above it at 63.825. A continued break down could lead to a test of the 61.80 support level. Resistance is at 64.90 and 66.75. Pork belly prices continue to collapse as it was down 12.24 to 158.32. 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.

Cold Storage Report

Total red meat supplies in freezers were up 1 percent from the previous month but down 8 percent from last year. Total pounds of beef in freezers were up 4 percent from the previous month but down 8 percent from last year. Frozen pork supplies were down 1 percent from the previous month and down 7 percent from last year. Stocks of pork bellies were down 21 percent from last month and down 65 percent from last year.

For those interested I hold a weekly livestock webinar on Thursday, August 25 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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