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Livestock Report


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The July Lean Hogs contract stayed within Mondays trading range. It was a choppy trading session with price ending higher on the day. The rally couldnt get above the 8 DMA (86.471) making the high at 86.40. A breakout above the 8 DMA could see price test resistance at 87.06. Resistance then comes in at 88.325. A break down from the 8 DMA could see price test support at 85.375 and then 83.325. The Lean Hog Index declined and is at 80.90 as of June 3rd and the pork cutout index dipped to 83.48 as of June 4th.

August Live Cattle grinded higher, making the session high at 105.30. It was also stymied by the 8 DMA which is just above the high at 105.353. It settled at 104.675. A breakout above the 8 DMA could see price test resistance at 106.025 and then the 13 DMA now at 106.686. A failure from the 8 DMA could see price test support at 104.20and then 103.00. The cash market has traded today with sales from 110.00 - 114.00 on a live basis. A small amount traded at 183.00 on a dressed basis. Boxed beef cutouts were lower as choice cutouts were down 0.89to 222.11 and select down 0.03 to 207.18 on light to moderate demand and moderate to heavy offerings. The choice/ select spread narrowed to 14.93 and the load count was 173. Slaughter was 119,000.

August Feeder Cattle followed through to the upside today taking out the Friday high (138.975) reaching 139.65 for the session high. The market reacted to the price action in corn, moving to the downside when corn rallied and moving higher when corn traded lower. Corn ended the day on its lows and feeder cattle ended the day on its highs. It settled at 139.45. Continued strength could see price test resistance at the upward sloping trendline at 140.25 for Thursday. Resistance then comes in at 140.775 and then the downward sloping 21 DMA at 141.914. A failure from settlement could see test support at 138.95. Support then comes in at 136.75. The Feeder Cattle Index fell to 131.88 as of June 4th.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 6that 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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