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Livestock Report


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Live Cattle

The December Live Cattle contract made a new high for the current up move on Tuesday, October 10, 2017, trading up to 119.10, just below the 119.15 resistance level. Trade was led by the October contract, which nearly went up limit; missing by .375. If the December contract fails to rise above the 119.15 resistance level, some consolidation within the Tuesday range is possible. A break out above the high, could lead to a test of resistance at 120.575 and then 121.35. The negotiated cash market was quiet on Tuesday. There were bids showing at 109.00, but they were passed over. The fedcattleexchange.com auction is on Wednesday with 1,440 head for sale. Will packers be more aggressive at the auction if futures continue to rally? Tuesday afternoon boxed beef cutout values were lower on Choice and higher for Select on light to moderate demand and light offerings. Choice was down 0.73 to 197.40 and Select was up 1.36 to 190.02 on 123 loads. The choice/ select spread narrowed to a plus 7.38. The estimated cattle slaughter for Tuesday was reported at 118,000.

Feeder Cattle

The November Feeder Cattle couldnt keep pace with Live Cattle as another attempt to break out above the 156.025 resistance failed. It did reach a new high for the up move at 156.975 and it ended the day above it at 156.175, but it formed a spinning top candlestick, which indicates indecision. The 156.025 will be pivotal for trading on Wednesday. If Feeders can sustain trade above it, a test of the e September 20 high (157.30) is possible. A rally from here could lead to a test of the 159.975 resistance level. A failure below the 156.025 level could lead to a test of the Tuesday low (155.15). Breaking down from here could see price test support at 154.25 and then 153.50. Support then comes in at 152.30.

Lean Hogs

The December Lean Hogs contract opened at the low ((61.225) and rallied to the session high (62.35), all in the first 5 minutes of trading. It spent the remainder of the day drifting lower and ended the session at 61.65, just below the 61.80 resistance level. The 61.80 level will be the pivotal number for trading on Wednesday. If price can recover and get above 61.80, a test of the Tuesday high is possible and then a rally from here could lead to a test of resistance at the 50 DMA (62.825). Resistance then comes in at 63.325. A break down from 61.80, could lead to a test of the Monday low (60.60) and then a test of support at the rising 13 DMA (60.225) and then the flat 21 DMA (59.925) and the trendline at 59.975. Support then comes in at 58.10.

For those interested I hold a weekly livestock webinar on Friday, October 13 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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