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Livestock Report


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Live Cattle

The December Live Cattle contract rallied on Wednesday, November 1, 2017. It rallied past resistance at 125.55, trading up just shy of the 127.15 resistance level, making the high at 126.875. It ended the session at 126.675. There is pretty good resistance from 127.15 to 128.30. Price could stall in this area and come back and test support at 125.55 and then 124.70. Breaking out above 128.30 could lead to a test of resistance at 129.35. The negotiated cash market was quiet on Tuesday. The fedcattleexchange.com auction took place with 1,515 cattle for sale. Packers only reacted to minimum bids from 120.00 and lower. The only accepted trade was at 120.00. Wednesday afternoon boxed beef cutout values higher on Choice and lower for Select on moderate to good demand and moderate to heavy offerings. Choice was up 0.95 to 207.39 and Select was down 0.19 to 193.71 on 139 loads. The choice/ select spread widened to a plus 13.68. The estimated cattle slaughter for Wednesday was reported at 116,000.

Feeder Cattle

The January Feeder Cattle contract rallied past the 159.975 resistance level and then took out the high from June 6 (160.90) on its way to making a new high for the up move at 161.25. It pulled back from the high and ended the session at 160.675. A continuation higher could lead to a test of resistance at the May 4th high (163.50). Aggressive buying could lead to a run to 164.825. A pullback below the 159.975 support level could lead to a test of support at 158.10.

Lean Hogs

The December Lean Hogs contract consolidated the Tuesday gains on Wednesday. The 67.80 resistance level and the declining 100 DMA (68.40) held Hogs in check as the high for the day came in at 68.00. This is below Tuesdays 68.175 high. It pulled back to the 66.55 support level, with the low at 66.30. It ended the session at 66.525, right at support. This is above The Tuesday low at 65.425. It formed an inside candle right at key support and resistance levels. A break out above the high could take price up and test resistance at 69.90. A failure from the low could lead price down to test support at the gap from the Tuesday low to the Monday high at 65.30. Support then comes in at 64.80.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, November 2 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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