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Livestock Report


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Live Cattle

The December Live Cattle contract rallied early in the trading session testing resistance at 116.55, making the high just below resistance at 116.325 on Tuesday, October 4. 2017. It broke down from the high and traded down to the days low by the end of the session at 114.875. It ended the day at 115.05. It ended up below the 200 DMA (115.575) and formed a gravestone doji candlestick. This could lead to a break down in price if we are able to trade under the session low. A break down under the low could see price test support at the 100 DMA (declining 114.325) and then the 13 DMA (rising 113.60). Trendline support comes in at 113.05. A reversal from the low could see a retest of the 2200 DMA and the 116.55 resistance level. Resistance then comes in at the September 22 high at 117.725. The negotiated cash market was quiet. The fedcattleexchange.com auction took place with 1,732 head for sale. Sales took place between 107.00 and 108.50. Wednesday afternoon boxed beef cutout values were lower on Choice and higher on Select on light to moderate demand and offerings. Choice was down 0.46 to 197.41 and Select up 0.53 to 189.53 on 118 loads. The choice/ select spread narrowed to a plus 7.86. The estimated cattle slaughter for Tuesday was reported at 117,000.

Feeder Cattle

The November Feeder Cattle tried to breakout to the upside but couldnt complete the task. It rallied above the Monday high (154.775) but couldnt make it past the September 29 high (155.55), making the session high at 155.40. It failed here and broke down to the low (153.425) at the end of the day. It ended the session just above the low at 153.75. A break down below the low could lead to a test of support at 152.30 and then the 21 DMA (151.825). A recovery from the 13 DMA (153.875) could lead to a retest of the high and then resistance at 156.025. Resistance then comes in at 159.975.

Lean Hogs

The December Lean Hogs contract traded within Tuesdays trading range, forming an inside candle. It formed another Doji candlestick. The Doji indicates indecision and a break down from the 61.80 support level could lead to a test of support at the 21 DMA (60.125) and the trendline at 59.975. Taking out the high (62.90) could lead to a test of resistance at 63.325 and then 64.90.

For those interested I hold a weekly livestock webinar on Friday, October 6 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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