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Livestock Report


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Live Cattle

The December Live Cattle contract had a strong rally from the open on Wednesday, September 27, 2017. It traded above the 100 DMA (114.85) and approached the 200 DMA (115.55) reaching a high at 115.325. It ended the session just above the 100 DMA at 114.925. Trading above the 200 DMA could lead to a test of the September 22 high at 117.725. A failure from the 100 DMA could see price revisit the Wednesday low (113.525). The negotiated cash market saw trades early in the morning at 105.00 and 105.50 in Iowa. The rally in the futures market had producers rejecting packer bids from 106.25 to 107.50 on the fedcattleexchange.com auction. There werent any sales at the auction because of the rejections and I didnt see any trades in the negotiated cash market afterwards. Wednesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and moderate offerings. Choice was down 1.48 to 195.30 and Select down 3.20 to 189.91 on 150 loads. The choice/ select spread widened to a plus 5.39. The estimated cattle slaughter for Wednesday was reported at 118,000.

Feeder Cattle

The November Feeder Cattle gap rallied from the open, taking out the Tuesday high and trading above the 8 DMA (154.05) reaching a high of 154.975. It ended the day (154.425) above the 8 DMA. It is now above the moving averages (8, 13, 21, 50, 100, 200) I follow, setting up a possible attempt to rally to resistance up at 156.025. A failure form the Tuesday high could see price revisit the Wednesday low (152.50).

Lean Hogs

The December Lean Hogs contract broke out above the Tuesday high and approached trendline resistance up at 60.025, reaching a high at 59.75. It ended the session just below the high at 59.65. It ended the day above the 8 (58.525) and 13 (59.15) DMAs, setting up a battle with the trendline the 21 DMA (60.225) for the Thursday trading session. A breakout above the 21 DMA could see price move towards resistance at 61.80. A failure from the Wednesday high could see a pullback towards the short-term moving averages and then the 58.10 support level.

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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