Cattle futures grinded higher today with the April Live Cattle settling above the 128.10 resistance level and the March Feeder cattle settling above the 50 DMA (144.65) in a quiet trading session. The settlement price for April Live Cattle was 128.30 and March Feeder Cattle was at 144.675. A continuation higher could see price challenge the January 31st high at 129.475. Resistance is just above it at 129.825. A failure from settlement could see price revisit support at 126.625. The USDA has reported cash traded on Friday; trade light to moderate in the Southern Plains. Compared to last week in the Southern Plains live purchases traded 1.00 higher at 125.00. Trade and demand was moderate in Nebraska and the Western Cornbelt. Compared to last week in Nebraska, live purchases traded mostly 1.00-1.50 higher from 124.50-125.50, bulk from 125.00-125.50. Dressed purchases traded mostly 2.00 higher at 200.00. In the Western Cornbelt compared to the previous week, live purchases traded steady to from 123.00-126.00, bulk from 124.50-126.00. Dressed purchases traded steady to 3.00 higher at 200.00. Boxed beef prices remained firm on Monday with choice up 1.53 to 216.88 and select up 2.69 to 213.86 on only 78 loads. There was moderate to good demand and light offerings. The choice/ select spread narrowed to 3.02. March Feeder Cattle has resistance at 145.05. A breakout above here could see price test the 146.20 resistance level. Support is at 144.20 and 143.50. April Hogs made a new low for the down move at 57.875. It recovered retook the 58.25 key level and traded up to the high at 59.375. Resistance is at 59.925. A rally above here could see the 100 DMA (60.56) tested; this time as resistance.
A hedge idea for cattle producers – buy the April 125 put and sell the 131 call at even money plus commission and fees.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, February 14th at 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.
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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.