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Livestock Report


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Live Cattle

The October Live Cattle contract reversed course on Wednesday, August 23, 2017, as the declining 13 DMA (107.625) provided resistance for the second day in a row. The session high (107.90) poked above the moving average and then Live Cattle broke down and traded down to test support at 106.00. It made its low at 105.775 and ended the day below support at 105.95. A failure from here could see a test of support at 104.85 and then 103.00. Resistance is at the 8 DMA (106.95), the 13 DMA and then 108.675. The fedcattleexchange auction took place on Wednesday morning with 1,067 head for sale. Nothing sold during the auction with 2 lots (107.00 and 107.25) rejected by producers. The negotiated cash market saw some trading at 106.00 – 107.00 for live and 172.00 – 173.00 for dressed. Wednesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and heavy offerings. Choice was down 0.70 at 192.33 and Select down 1.42 to 189.47 on 159 loads. The choice/ select spread widened to 2.86. The estimated cattle slaughter for Wednesday was reported at 116,000.

Feeder Cattle

The September Feeder Cattle drifted lower on Wednesday, also failing to overtake the 13 DMA (142.60). It reached a high of 142.90 and the dipped down to a low at141.20. It ended the session just below the 8 DMA (141.95) at 141.65. Breaking above the Wednesday 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 to a new low at 62.775. It found support at that level and ended the session at 63.325, forming a hammer candle stick. A rally above the session high (63.775) could lead to a test of the 64.90 resistance level. A continued break down could lead to a test of the 61.80 support level. Pork belly prices continued to decline, as it was down 6.31 to 152.01. Pork Belly prices have been a key driver for the Lean Hogs and a continued break down could lead to a bigger decline 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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