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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Tim Hannagan's Weekly Grain Report for March 7, 2014
Mar 07, 2014
This is Tim Hannagan it's Friday, March 7th. With the beans rallying over two dollars the last five weeks, everyone wants to know when a measurable correction will occur. There are some suggestions it's near. We spent February and early March pricing in poor growing and harvest weather in South America and problems with the Ukraine threatening grain shipments. Brazil is the largest producer exporter of beans. Argentina is the third largest producer exporter. The Ukraine is the third largest corn shipper and sixth largest for wheat. Needless to say problems there means higher prices here. Here are a few ideas that might help your trading while controlling risk. Demand for U.S. beans may have begun to erode. Monday at 10 AM central time our weekly inspection report showed 36 million bushels were inspected to be shipped to importers versus the two prior weeks of 54 and 57. Of the 36 million bushels shipped China was in for 18 million bushels versus the two weeks prior at 39 million and 47 million. Last March shipments collapsed as the South American crop came online, leaving the U.S. no longer the primary port of origin for beans. Last March 4th we inspected and shipped 40.2 million bushels, with China in for 25 of the total. Last March 11th, the U.S. shipped 17 million with China in for just 2.7. On March 18th we shipped 9 million with China in for five million of the total, and lastly March 25th of last year saw the U. S. shipping 18 million and China in for 6 million of that total. Last March export sales for future shipment also collapsed. On February 28th 2013 we exported for future shipment 684 thousand metric tons. On March 7th exports were 392 million. On March 14th, 66 million. March 21st, 107 million and March 28th, 66 million. April was bearish on shipments and export sales as well.
Now, at 11 AM central time Monday our monthly USDA crop report is released. Traders fear it to show a sharp drop in bean ending stocks. Once the report is priced in we could see a seasonal break as the March 10 report is the last bullish report for beans before we plant and weather becomes the driving force. On March 31st the planting intention report is expected to come in showing 2 to 4 million more acres planted for beans and 2 to 4 less for corn due to the high prices of soybeans. If the March 10 report is bullish were set up for a weak close or key reversal on the charts. May bean resistance is 14.79 then 15.25 with support 14.50 then 14.00. May corn resistance is at 4.94 then 5.14, with support at 4.82. May wheat resistance 6.80 with support 6.48
For those interested I hold a weekly grain webinar series every Thursday at 3pm central time talking covering everything that is pertinent to the grain market. Registration is free and if you cannot attend live, a recording will be sent to your email upon signup. Link for registration is below.
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.