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Livestock Report


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Cattle futures grinded higher today with the April Live Cattle settling above the 128.10 resistance level and the March Feeder cattle settling above the 50 DMA (144.65) in a quiet trading session.  The settlement price for April Live Cattle was 128.30 and March Feeder Cattle was at 144.675. A continuation higher could see price challenge the January 31st high at 129.475. Resistance is just above it at 129.825. A failure from settlement could see price revisit support at 126.625. The USDA has reported cash traded on Friday; trade light to moderate in the Southern Plains. Compared to last week in the Southern Plains live purchases traded 1.00 higher at 125.00. Trade and demand was moderate in Nebraska and the Western Cornbelt. Compared to last week in Nebraska, live purchases traded mostly 1.00-1.50 higher from 124.50-125.50, bulk from 125.00-125.50. Dressed purchases traded mostly 2.00 higher at 200.00. In the Western Cornbelt compared to the previous week, live purchases traded steady to from 123.00-126.00, bulk from 124.50-126.00. Dressed purchases traded steady to 3.00 higher at 200.00. Boxed beef prices remained firm on Monday with choice up 1.53 to 216.88 and select up 2.69 to 213.86 on only 78 loads. There was moderate to good demand and light offerings. The choice/ select spread narrowed to 3.02. March Feeder Cattle has resistance at 145.05. A breakout above here could see price test the 146.20 resistance level. Support is at 144.20 and 143.50. April Hogs made a new low for the down move at 57.875. It recovered retook the 58.25 key level and traded up to the high at 59.375. Resistance is at 59.925. A rally above here could see the 100 DMA (60.56) tested; this time as resistance.

 

 

A hedge idea for cattle producers – buy the April 125 put and sell the 131 call at even money plus commission and fees.

 

 For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, February 14th at 3:00 pm. 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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