Livestock Report
Ben DiCostanzo of Walsh Trading, Inc. - InsideFutures.com - Wed Jan 03, 4:41PM CST

Live Cattle

The February Live Cattle contract spent Wednesday, January 3, 2018 trading within the Tuesday range. Price opened (123.325) above but couldnt stay above the 123.125 key level. It made the session high at 123.35 (just below the Tuesday high at 123.50) and made its way lower, trading to the low of the day at 122.35 (just above the Tuesday low at 122.20) by mid-session. Live Cattle grinded higher till the end of the session and it ended the day at 122.85. Trading above the Wednesday high could see price test resistance at 124.675 and then 125.50. A break down below the low could see price test support at the rising 50 DMA (121.95) and then 121.325. Expectations for this week in the cash market are for steady to higher prices. The first fedcattleexchange.com auction for 2018 took place on Wednesday with only 388 head for sale. There werent any trades as packers passed on the minimum bids posted by producers. The negotiated cash trade was at a standstill on Wednesday. Wednesday afternoon boxed beef cutout values were higher on Choice and Select on moderate demand and light to moderate offerings. Choice was up 3.48 to 208.62 and Select was up 2.59 to 199.16 on 156 loads. The choice/ select spread widened to a plus 9.46. The estimated cattle slaughter for Wednesday was reported at 117,000.

Feeder Cattle

The March Feeder Cattle contract did very little on Wednesday. It traded (147.125 high) within the Tuesday high (147.175) and just below the 146.20 support level (146.15 low). A breakout above the Tuesday high could lead to a test of resistance at the rising 200 DMA (148.275). A break down below 146.20 could lead to a test of support at 145.05.

Lean Hogs

The February Lean Hogs contract tested support at the 200 DMA (70.40), making the session low just below it at 70.20 before recovering and rallying back to test the session high at 71.20. It ended the day nearby at 71.075. The rally put Lean Hogs back in the middle of the consolidation range and the Doji candle formation puts the session high as the pivot for Thursdays trade, in my opinion. A breakout above the 71.20 high could send price back to the upper end of the range with resistance at 72.45. A breakdown from 71.20 could lead to a retest of support at the 200 DMA.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, January 4th, at 3:00pm. 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.