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Livestock Report


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Live Cattle

The October Live Cattle contract broke down at the open and tested support (106.20) on Wednesday, September 13, 2017. It traded down to a low at 105.40, consolidated just above it and started to rally at the time of the fedcattleexchange.com auction. Price strengthened throughout the day, reaching the high (107.75) at the end of the session. A breakout above the Wednesday high could see price test the 108.675 resistance level. Continued strength could see movement towards the 110.80 resistance level. A trade below the 106.20 support level could see the 104.875 support level tested. Support then comes in at 103.00. The negotiated cash market was quiet. The fedcattleexchange.com auction took place with 1,063 head for sale. There were 3 lots traded at 104.75 during the auction, but only one was accepted. Cash remains stagnant with packers refusing to budge as minimum bids of 105.00 were ignored and bidding took place from the 103 and 104 levels with the afore mentioned 104.75 level traded. Wednesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and moderate offerings. Choice was down 0.39 to 190.40 and Select down 2.17 to 188.69 on 157 loads. The choice/ select spread popped from yesterday’s -0.07 to a plus 1.71. The estimated cattle slaughter for Wednesday was reported at 117,000.

Feeder Cattle

The October Feeder Cattle contract opened lower and broke down below the 100 DMA (148.45), making the session low at 147.35. It snapped back off the low and rallied the remainder of the day trading through the 149.975 resistance level, reaching a high at 150.25. It dipped below the resistance level and ended the day at 149.80. It formed an outside day candle, as the Wednesday range was wider than the Tuesday session. The 100 DMA and the 149.975 resistance level were both pierced with the market snapping back in between them, showing the difficulty in fighting the support and resistance levels. A rally above the 149.975 resistance level could see price test the 151.725 high from August 3rd and then the 152.30 resistance level. A break down below the 100 DMA could see support tested at 146.20.

Lean Hogs

The October Lean Hogs contract gap opened lower and traded down towards the 58.10 support level, making the low at 58.25. It bounced from the low and rallied to the high at 59.975, just below trendline resistance at 60.125. A pullback at the end of the day took Hogs down to Tuesdays low (59.225), and the day ended at 59.35. It formed a spinning top candle and continued weakness could see price break down below support at 58.10. Support comes in at 56.15 and the 54.80. A breakout above the Wednesday high could see price close the gap at 61.25 (Monday low). Resistance then comes in at 61.80.

For those interested I hold a weekly livestock webinar on Friday, September 15 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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