The April Live Cattle contract traded in a tight range on Wednesday, March 7, 2018, forming a Doji Candlestick and is within the Tuesday range. The high was 123.675, the low 122.60 and it ended at 123.125. It is right at the 8 (123.30) and 50 (123.10) DMAs. It is also ended right on the key level at 123.125. A break down below the Wednesday low could see the rising 100 DMA (122.175) tested and then support ten at 121.325. A rally above the Wednesday high could lead to a retest of resistance at 124.70. The negotiated cash trade was very light on light demand in all major feeding regions. Wednesday afternoon boxed beef cutout values were steady on Choice and Select on light to moderate demand and offerings. Choice was up 0.22 to 223.57 and Select was unchanged at 215.20 on 136 loads. The choice/ select spread widened to 8.37. The estimated cattle slaughter for Wednesday was reported at 114,000.
The April Feeder Cattle contract opened (146.00) at the 50 DMA (145.975) and broke down towards support at 145.05, reaching the low at 145.20. Support held and it recovered and traded up to the session high at 146.625. A late session selloff took price back to the low and it ended the day at 145.40. The break down at the end of the day took price back below the 50 DMA and a continuation lower could see price break below the 145.05 support level and trade down to test support at 144.20 (February 9th low) and then 143.50. Holding the 145.05 support level could see the 50 DMA tested and then the 146.20 resistance level. Resistance then comes in at 147.35 and then the declining trendline now at 148.40 for Thursdays trade.
The April Lean Hogs contract opened (68.075) lower, and traded down to the low (66.425) of the day. This was right at trendline (66.75) support. Support is also at 66.50. A late day rally took price to a new high (68.325) for the day. This is right on the declining 8 DMA (68.325). It ended the day just below the high at 67.95. It formed a Doji Candlestick. A rebound from the high could see price test the rising 100 DMA, now at 68.65 and then the 13 DMA at 69.00. The 21 DMA follows at 69.325. A breakdown from the Wednesday could see price revisit support.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 8th at 2:30pm. 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.* *
Senior Market Strategist
Walsh Trading, Inc.
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.