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Livestock Report


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June Lean Hogs grinded higher today, besting resistance at 90.45 and then the May 7th high (91.35) was taken out on its way to 92.00 the session high. It settled at 91.825 below resistance at 92.375. It is the highest close since May 3rd as it closed the gap from the low (91.975) on that day to the May 7th high. Continued strength could see the 93.50 resistance level tested. An inability to rally past 92.375 could see price revisit support at 9045. The Lean Hog index is at 83.27 as of May 13th and the pork cutout index continues to move higher and it is now at 86.96 as of May 14th.

June Live Cattle inched out another new low for the down move making the session low at 109.20. It was a quiet session that resulted in a narrow range candle. It is the smallest range of the past 6 sessions and could lead to increased volatility going forward. A weak open could see price test support at 108.65. Support then comes in at 107.30. Another attempt to recover could see price test resistance at 110.80 and then the Tuesday high. The cash market traded at 117.00 on a live basis as packers able to work prices lower. Boxed beef cutouts continue to move counter-seasonally. Choice cutouts were down 0.55 to 219.57 and select fell 0.93 to 208.04 on light to moderate demand and moderate offerings. The choice/ select spread widened to 11.53 and the load count was 143. Slaughter was 121,000.

August Feeder Cattle made a new low for the down move, trading down to the session low at 141.175. It rebounded and settled at 142.275. It settled just below support at 142.40. Continued weakness could see price test support at 140.775. Support then comes in at 138.95. If the 142.40 support level holds, price could retest resistance at 143.50 and then 144.20. The Feeder Cattle Index continues to move lower as it came in at 134.77 as of May 14th.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 16that 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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