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Livestock Report


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Live Cattle

The December Live Cattle contract broke down below the 124.70 support level on Wednesday, November 8, 2017. It traded down to the session low of 122.15, which is just below the 123.125 support level and the rising 13 DMA (122.85). It was able to bounce from here (late session rally) and it ended in between the 123.125 support level and the 13 DMA at 122.925. This area could be the key for Thursday. A rally above this area, could lead to a test of the 124.70 resistance level. Trading below the 13 DMA could to a test of support at 121.325. This would close the remainder of the gap from 121.625 to the Thursday low (partially closed the gap from 122.325). The negotiated cash market trade was moderate on moderate demand in the Southern Plains, with live sales1.00 3.00 lower than last week at 122.00 124.00 and dressed sales steady at 192.00. Trade was light on light demand in all other feeding regions. The fedcattlexchange.com auction took place with 1,191 head for sale. Sales were made at 124.00 in Texas and Kansas, with no sales in Nebraska. 465 of the 1,191 cattle were sold. Wednesday afternoon boxed beef cutout values were higher on Choice and Select on light to moderate demand and moderate offerings. Choice was up 0.49 to 213.13 and Select was up 1.13 to 198.89 on 139 loads. The choice/ select spread narrowed to a plus 14.24. The estimated cattle slaughter for Wednesday was reported at 116,000.

Feeder Cattle

The January Feeder Cattle contract broke down hard from the Tuesday low (159.40) and the 159.975 support level. It traded down to the morning low (156.80) then consolidating between the low and 157.60 before breaking down at the 1pm settlement to a new low at 156.65. It recovered after settlement and ended at 157.25. The 155.90 156.025 156.425 support zone could be the key to Thursdays trade, in my opinion. The 155.90 level is the rising 21 DMA, 156.025 is a key level I use and 156.425 is a declining trendline that Feeder Cattle broke out above on the rally to the recent 162.075 high. If price can hold this area, we may see a retest of resistance at 159.975. Breaking down and holding below this zone could see price test support at 154.25 and then 153.70. The gap from 157.125 to 156.775 was closed and this could be supportive to the market.

Lean Hogs

The December Lean Hogs contract tested the rising 21 DMA (64.325) Wednesday morning, making the session high at 64.25 and the making its way to the low (63.35) by the end of the trading session. The low is just above the 63.325 support level. It ended the day just above the low at 63.575. 63.325 will be the key level for Thursday, in my opinion. A break down below this level could take price down towards the 61.80 support level. Holding above the 63.325 level could lead to a retest of the rising 21 DMA.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, November 9 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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