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Livestock Report


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Live Cattle

The December Live Cattle contract broke down on Tuesday, October 17, 2017 as analysts estimates for the upcoming Cattle on Feed report were revealed. Analysts are predicting another bearish report on Friday afternoon. Price tested the 8 DMA (117.425), reaching a high of 117.475 early on in the session, before breaking down mid-session and trading to the session low (115.825)at the end of the day. It ended the day at 116.225, just below support at the 116.55 level. Support is at the 200 DMA (115.625). A break down below here could lead to a test of support at 114.25. A rally above 116.55 could lead to a test of the 8 DMA and then the 119.15 resistance level. The negotiated cash market was quiet. Tuesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and offerings. Choice was down 1.15 to 197.66 and Select was down 0.72 to 189.85 on 119 loads. The choice/ select spread narrowed to a plus 7.81. The estimated cattle slaughter for Tuesday was reported at 117,000.

Feeder Cattle

The January Feeder Cattle contract looks like it is taking over as the lead contract as its volume exceeded the November contract for the first time on Tuesday. Price broke down and traded down to a low of 150.325. It ended the day nearby at 150.50. The high was 152.90. Support is at 149.975 and a break down from here could see price test the 100 DMA (149.20), the 50 DMA (148.725) and then support at the 147.35 level. A turnaround from the low could see price revisit the152.30 resistance level.

Lean Hogs

The December Lean Hogs contract opened (64.00) higher and rallied towards the 64.80 resistance level, reaching a high at 64.50. It failed from here and broke down to test the 61.80 support level, making the low just above at 61.975. It is back in between the 50 (62.45) and 8 (62.05) DMAs; as it ended the day at 62.225. It formed a bearish engulfing candle and follow through to the downside could lead to a test of support at the rising 21 DMA (60.575) and the trendline at 59.80. A recovery from the low could see price test resistance at 63.325.

For those interested I hold a weekly livestock webinar on Friday, October 20 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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