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Livestock Report


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The February Lean Hogs contract made an about-face after failing to take out the Friday high early in the trading session. After failing to overtake the Friday high (69.325) by topping out at 68.975, price broke down and fell below the 100 DMA (68.12) and then collapsed. It fell past support at 66.55 almost going down limit and making a new low in the process. It traded down to 65.40 and a late session recovery took price higher and it settled at 66.15. Settlement is below the 66.55 support level and could lead to continued weakness on the open. A breakdown below the low could see price test the 64.80 64.25 support area. Support then comes in at 63.325. A recovery above 66.55 could see price retest the 100 DMA. The Lean Hog index dipped lower and is at 58.35 as of 11/27/2019. The Pork Cutout Index ticked higher and is at 82.17 as of 11/29/2019.

The February Live Cattle opened lower and tested support at the 13 DMA (124.83) making the low just above it at 125.025. It was another quiet trading session in cattle as the market essentially drifted all day and settle at the key level 125.80. The high was on the open at 126.00. Like I said a drifting, quiet session. A breakout above the high could see resistance tested at 126.625. Resistance then comes in at 128.10. A failure from settlement could see support at 124.30 revisited. Cash traded a tiny amount at 187.00 on a dressed basis. Boxed Beef cutouts were higher on moderate to good demand and light to moderate offerings. Choice cutouts rose 0.49 to 232.61 and select was up 2.64 to 212.98. The choice/ select spread narrowed to 19.63 and the load count was 83. Slaughter was 117,000.

January Feeder Cattle opened (142.10) below the 200 DMA (142.34) and crashed, trading to the low of the day at 140.35. This is just below the 140.775 support level. It reversed course and rallied above the 200 DMA, making the session high at 142.60 and then settling just below the 200 DMA at 142.15. It formed a Doji candlestick. A rally above the high could see resistance tested at 143.50. Resistance then comes in at 144.25 and then 145.05. A breakdown from settlement could see support revisited at 140.775. The Feeder Cattle Index was higher and is at 144.97 as of 11/29/2019.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, December 5that 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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