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Livestock Report


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Live Cattle

The December Live Cattle contract gap opened lower and traded down to the low (113.10) on Tuesday, September 26, 2017. It spent most of the session grinding higher and made the high at 114.325, nearly closing the gap created from yesterdays low (114.425) to Tuesdays open. A late day selloff took price down to 113.30 and it ended the day at 113.475. The price action created a spinning top candlestick and a break down through the low could lead to a test of support at 112.425. Support then comes in at 110.80. A bounce from the low could see the gap closed and follow through to the upside could lead to a test of the 100 DMA at 114.975 and then the 200 DMA at 115.525. A piercing of the 200 DMA could lead to a possible gap close at 115.65 (gap is from 115.65 to 115.20). The negotiated cash market was quiet. The fedcattleexchange.com auction is on Wednesday with 1,342 head for sale. We get to see whether or not producers hopes for higher cash prices are met by the packers desire for higher margin. Tuesday afternoon boxed beef cutout values were higher on Choice and Select on moderate to fairly good demand and light offerings. Choice was up 2.82 to 196.78 and Select up 2.22 to 193.11 on 105 loads. The choice/ select spread widened to a plus 3.67. The estimated cattle slaughter for Tuesday was reported at 118,000.

Feeder Cattle

The November Feeder Cattle gap opened lower and broke down to the session low (151.375), then rebounding and trading up to the high (153.725), closing the gap formed at the open. It broke down at the end of the day, falling back to 152.00. This is just below support at 152.30. Continued pressure could see a test of support at 149.975. A rally above 152.30 could see price test resistance at 153.70 then 154.25 and then 156.025.

Lean Hogs

The December Lean Hogs contract opened higher and traded down to its session low at 56.95 before reversing and trading to the high of the day at 58.325. It spent the bulk of the session consolidating around the 58.10 resistance level, trading between 58.25 and 57.725. The session ended at 58.025. A rally above the high could see a test of resistance at the 8 DMA (58.70) and then the 13 DMA (59.35). Trendline resistance is at 60.025 and the 21 DMA is at 60.30. A breakdown below 57.60 could lead to a test of support at 56.15 and then 54.80.

For those interested I hold a weekly livestock webinar on Friday, September 29 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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