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Livestock Report


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Live Cattle

The October Live Cattle contract rallied to trendline resistance on Monday, August 28, 2017, trading up to 109.75, just below the trendline at 109.775. It couldnt sustain the rally and pulled back below the 21 DMA (109.05) and the 108.675 support level, ending the day at 108.55. It formed a shooting star candle for the second day in a row. If the October contract trades below the Monday low (107.60), a test support at 107.05 and 106.00 is possible. Getting above 108.675 could see a a test of the trendline, now at 109.525 and resistance at 110.80. The negotiated cash market saw some trading at 106.00 – 107.00 for live and 168.00 – 170.00 for dressed on Monday. Some of the sales were for 15 – 30 day delivery. Monsday afternoon boxed beef cutout values were higher on Choice and Select on moderate demand and moderate to heavy offerings. Choice was up 0.18 at 191.50 and Select up 0.32 to 188.62 on 130 loads. The choice/ select spread narrowed to 2.88. The estimated cattle slaughter for Monday was reported at 116,000.

Feeder Cattle

The October Feeder Cattle opened higher and traded up to the 50 (146.625) and 100 (147.575) DMAs. It reached a high of 147.25 before pulling back and ending the session at 146.475, just below the 50 DMA. Resistance is at the 50 and 100 DMAs. Breaking out above the 100 DMA could see a test of resistance at 149.975. The 21 DMA should provide support at 144.475 and a breakdown below it could see a test of the 143.50 support level.

Lean Hogs

The October Lean Hogs contract broke down to a new low at 61.575. It ended below the 61.80 support level and continued weakness could lead to a test of the 58.10 support level. Resistance is at 63.35 and 64.90. Pork belly prices continued to decline, as it was down 6.21 to 137.17. 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.

For those interested I hold a weekly livestock webinar on Friday, September 1 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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