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Livestock Report


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Live Cattle

The October Live Cattle contract rallied at the open and tested the 108.675 resistance level on Thursday, September 14, 2017. It reached a high at 108.90 before failing and trading down to a low at 106.625 and then ending the day at 107.05. The breakdown approached support at the short-term moving averages (the 8 DMA (106.475), the 13 (106.375) and the 21 (106.50)), but stopped just above them. It also is above horizontal line support at 106.20. A trade below the 106.20 support level could see the 104.875 support level tested. Support then comes in at 103.00. A recovery from the Thursday low could see price revisit the 108.675 resistance level. A breakout above it could see price move towards the 110.80 resistance level. The negotiated cash market was quiet. Thursday afternoon boxed beef cutout values were higher on Choice and lower for Select on light to moderate demand and heavy offerings. Choice was up 0.60 to 191.00 and Select down 1.97 to 186.72 on 199 loads. The choice/ select spread popped to a plus 4.28. The estimated cattle slaughter for Thursday was reported at 118,000.

Feeder Cattle

The October Feeder Cattle contract made a new high for the up move on Thursday as an early rally took price to 150.775, just above the Wednesday high (150.25). The rally couldnt hold and price fell back below the 149.975 resistance level, trading to the session low at 148.50. The breakdown pierced through the 100 DMA (148.575), before recovering and ending the day at 149.80. It formed a Doji candle which represents indecision, showing the difficulty Feeder Cattle has 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 attempted an early rally, trading up to the high at 60.10 right at trendline resistance (60.125). It couldnt penetrate the trendline and broke down to the session low at 58.60. Price drifted higher off the low and ended the day at 59.075. It formed a spinning top candle and continued weakness could see price break down below support at 58.10 and test the next level of support at 56.15. Support then comes in at 54.80. A breakout above the trendline 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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