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Livestock Report


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Live Cattle

The December Live Cattle contract traded between the 8 DMA (117.275) and the 200 DMA (115.625) on Thursday, October 19, 2017; it reached a high of 117.40 and a low of 115.55 ending the session in the lower middle of the range at 116.275. It is still hanging around the key 116.55 level, unable to make headway on either side of this price level. It formed a small bodied candle and price will continue to pivot around this price level. If price can get above 116.55, a test of the 8 DMA is possible and then breaking above the October 13 high (117.575) could lead to a test of resistance at 118.10 and then 119.15. If price breaks down from 116.55, we can test the 200 DMA, the Wednesday low (114.525) and then the 100 DMA (113.875). A break down below here could lead to a test of support at the 200 DMA (115.625) and then the Wednesday low. A rally above the 8 DMA could lead to a test October 11 low (118.10) and then the 119.15 resistance level. The negotiated cash market saw a handful of live cattle sold at 110.00 and 172.00 dressed. Thursday afternoon boxed beef cutout values were sharply higher on Choice and Select on moderate to good demand and moderate to heavy offerings. Choice was up 2.31 to 199.57 and Select was up 1.67 to 190.76 on 149 loads. The choice/ select spread narrowed to a plus 7.81. The estimated cattle slaughter for Thursday was reported at 117,000. The cattle on feed report will be released after the close on Friday afternoon at 2pm. Call me for consensus estimates.

Feeder Cattle

The January Feeder Cattle contract approached the 100 (149.25) DMA early in the trading session, making the low at 149.375 , found support and grinded higher before spiking at the end of the day and making the high at 151.625. It ended the session at 151.10 and put in a bullish morning star candle formation. Follow through to the upside could take price up to resistance at 152.30 and then 153.50. Resistance is at 154.25 and then 156.025. A break down from the high could lead to a test of support at the 149.975 level and then the 100 DMA. The 50 DMA is nearby at 149.00 and then 147.35.

Lean Hogs

The December Lean Hogs contract rallied from the Wednesday high reaching a new high for the week at 64.65, but still unable to trade above the 64.80 resistance level. It formed a spinning top candle showing indecision. A breakout above 64.80 could lead to a test of resistance at 66.50. Breaking down from the end of day price (64.30) could see the 63.325 support level tested. Support then comes in at the rising 8 (62.80) and 13 (62.45) DMAs.

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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