Live Cattle Outlook
Market updates from Walsh Trading.
Live Cattle –
In four of the past five weeks Live Cattle made new highs. Last week was no exception. However, after making new highs on Thursday, sellers came in and a pullback resulted. The pullback formed a Bearish Engulfing candle. An engulfing candle formation is a two bar formation. The 1st candle’s open and close is engulfed by the 2nd candles’ open and close. It is considered a reversal formation. It can be either bullish or bearish. It depends where it takes place in the price action. This one is a bearish formation in my opinion. It also formed an outside day where it took out both the high and low of the previous day. It also covered the four days prior highs’ and lows’. This in my view is another negative condition. The weekly chart has also the makings of a reversal formation. Cattle had a strong rally 2 weeks ago and then made another new high this week. After making the new high Cattle couldn’t hold on to it. Buyers and sellers fought it out and ended up closing the week near the open. This is a Doji. The neutral end to the week in my view shows buyers are becoming cautious. A red candle close this week would form an Evening Star Formation. This is considered a reversal signal. If cattle takes out last week’s low at 164.40, sellers could take control. The 38.2% retracement lies in wait at 159.90 and the weekly 8 period simple moving average is at 158.6.
Please join me as I take a look at the Livestock markets on October 22, 2014. If you are not able to attend the webinar live, a recording will be sent to you if you register for the event.
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Senior Market Strategist
Walsh Trading, Inc.
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Chicago, IL 60604
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Tim Hannagan's Weekly Grain Report for April 25
Apr 25, 2014
This is Tim Hannagan it's Friday, April 25th. Wheat is worried about weather on the emerging wheat crops and corns weather concerns are over wet conditions delaying fieldwork and planting delays, beans don't worry about weather until May as beans are planted last. This leaves demand next week still a pricing source. Demand for soybeans has slowed appreciably. We've gone from exporting 354 thousand metric tons weekly, 5 to 8 weeks ago, to 43 thousand metric tons the last four weeks. Thursday's weekly export sales report showed 800 metric tons sold for future shipment, a marketing year low. Seasonally exports will further erode in May. After May 1st trend and index following funds refocus away from demand to weather and its effects on planting. Traders will use weather to determine if excess rain and corn planting delays will lead to more or less beans going to seed. When you consider the price of beans versus corn, it would be a very easy decision to switch corn acres over to beans. Every year this discussion on switching arises but never really occurs. This year is different as the price comparison is huge. With a wet week ahead for the Midwest slowing and stopping fieldwork and planting we should look for beans to have a bearish reaction after initially opening up higher. Sell any weather strength Sunday into Monday. Look for selling into Wednesday.
Wheat’s late week’s strength came on two issues. One, the weekend could be confrontational between Russia and the Ukraine. Secondly potential for snow in the Dakotas and Kansas affecting winter wheat emergence in Kansas and spring wheat planting in the Dakotas. This should be priced in Sunday into Monday making for a good sell and look for late month end profit-taking into Wednesday. As for corn, if we enter Sunday's trade and traders see the rain projected with areas of 3 to 6 inches called for, look for higher prices, possibly 5.14 basis May. Sell it and look for month-end profit-taking. May corn support is 5.00 resistance 5.14. May bean support is 14.55 resistance 15.40. May wheat support 6.92 then 6.70 resistance is 7.04 then 7.22.
Do not forget to attend my free grain webinar each Thursday at 3:00 central time. I will cover the weeks demand reports, charts, crop condition reports and review the weather. Sign up is free just click the link below.
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Senior Grain Analyst, Walsh Trading
312-957-8108 or 888.391.7894
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