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Livestock Report


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The August Lean Hogs contract made a new low for the down move, trading down to 75.50 during the first 5 minutes of the trading session Huh. In a mesmerizing turn around Hogs bulled its way higher and by mid-morning was limit up yup limit up for the day It got there and stayed firm for the rest of the session wow Settlement was 79.075 expanded limits for Wednesdays trade for the Hog complex whew... a bullish outside candlestick with the mower low from the open whats next?... Hogs face strong resistance just above the downward sloping 21 DMA is at 79.65 and then the 79.80 to 80.45 resistance zone looms. The July 3rd high is at 80.85. Lots of obstacles for Hogs If price can break out above this grouping a test of the rising 100 DMA at 82.30 is possible. Dont forget limits have expanded for trade on WednesdayIf traders are shell shocked and wait to see what happens to price next. Then we should consolidate within the Tuesday range. Support is at 77.80 and then 76.175. The Lean Hog Index declined and is at 71.92 as of July 5th. The pork cutout index fell to 72.58as of July 8th.

August Live Cattle dipped below the 106.025 support level, traded to the session low at 105.85 and then it also raced higher. It didnt trade up limit however as trendline resistance was able to contain the rally. Cattle pushed past resistance at 107.30 on its way to the session high at 108.425. This is just below the 108.65 resistance level. It also couldnt stay above trendline resistance at 108.25, settling at 108.125. Cattle made a new high for the up move and a bullish outside candlestick is in play. A failure to take advantage of this candle and make another new high could see price retreat and fall back into its trading range. A new high could see price push past resistance and move towards resistance at 110.80. The cash market was quiet. Boxed beef cutouts crashed as choice cutouts were down 2.73 to 214.73 and select was down 2.32 to 192.09 on light demand and heavy offerings. The choice/ select spread narrowed to 22.64 and the load count was 134. Slaughter was 121,000.

August Feeder Cattle surged higher as it nearly went up limit. It opened above the 138.95 resistance level and never looked back. It blew past resistance at 140.775 and never looked back. It traded past resistance at 142.40 consolidated just above it and then at the end of the day attempted to reach the limit price but didnt make it. The high was 143.30, just below limit and the143.50 resistance level. It settled at 142.875. This is a new high for the up move and continued upward pressure could see price test resistance at 144.25 and the 100 DMA at 144.73. A failure from resistance at 143.50 could see price consolidate within the Tuesday range. The Feeder Cattle Index bounced higher and is at 135.44as of July 8th.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, July 11that 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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