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Livestock Report


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The October Lean Hogs contract is now the lead contract as its volume has overtaken the August contract. It opened the session at 77.075 and broke down to the session low at 76.125. This is just below the 76.175 support level. It reversed course and rallied to the high of the day at 79.475. It settled at 78.925. A break out above the high could see price test resistance at 80.45. A failure from settlement could see price test support at 77.80. The Lean Hog Index is at 70.79 as of July 16th. The pork cutout index jumped to 73.91 as of July 17th.

October Live Cattle is the lead contract as its volume has been higher than the August contract. It consolidated Thursdays decline and made a slightly lower low at 107.85. The high at 108.725 is just above resistance at 108.65. The low is above support at 107.30. It settled at 108.50. The market simmered as it waited for cash to trade in front of the Cattle on Feed and Inventory reports. The cash market was quiet so traders sat on their hands and waited for the reports. The on feed report came in at expected levels so is in my opinion a neutral report. Placements came in 2% below last year, marketings were 3% below last year and placements were 2% above last year. All cattle and calves totaled 103 million which is unchanged from last year. If cattle can take out 108.65 a run to resistance at 110.80 is likely. Resistance then comes in at 112.35. A failure from settlement could see price revisit the 107.30 support level and then move towards support at 106.025. Boxed beef cutouts were higher as choice cutouts were up 0.08 to 213.42 and select was up 0.90 to 189.51 on moderate to good demand and moderate offerings. The choice/ select spread narrowed to 23.91 and the load count was 90. Slaughter was 118,000. Slaughter is expected at 52,000 for Saturday to bring the weekly total to an estimated 651,000. Cash has traded this week between 111.00 and 115.00 on a live basis. It has traded between 182.00 and 185.00 on a dressed basis.

August Feeder Cattle consolidated within Thursdays trading range and between support at 138.95 making the low of the day at 139.125 and making the high at resistance at the 13 DMA at 140.40. It settled at 139.975. A rally above the high could see price test Thursdays high at 141.375. Resistance then comes in at 142.40 and 143.50. The high for the up move is at 143.75. A break down below 138.95 could see price test support down at 136.75. The Feeder Cattle Index declined to 138.67 as of July 18th.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, July 25that 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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