The October Live Cattle contract broke down through Monday’s low on Tuesday, August 8, 2017, trading down to 110.175 and ending the session near the low at 110.40. It closed below the 110.80 support level and the next support level to challenge is the April 5th low at 108.675. Resistance is at 112.425 and 113.70.
The failure to hold the line in the futures market has allowed packers to buy cattle cheaper in the cash market with live sale taking place mostly between 115.00 and 116.00. There was a small amount traded at 114.00 in Iowa. The fed cattle exchange auction is on Wednesday morning and there are 1,659 head for sale. Tuesday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and offerings. Choice was down .47 at 202.25 and Select down 0.14 to close at 196.86 on 149 loads. The choice/ select spread narrowed to 5.39. The estimated cattle slaughter for Monday was reported at 119,000.
The September Feeder Cattle contract broke down and is challenging the 100 DMA (146.225). The session low is 145.80 and it ended up the day at 146.225 (right on the 100 DMA). Trendline support is nearby at 145.65 and a break down from here could lead to a test of support at 144.65. Support then comes in at 141.20. Resistance is at 147.625 and then 149.975.
The October Lean Hogs contract tested the 200 DMA (68.725) and the 67.90 support level, trading up to 68.90 and down to 67.70. It was an uneventful day with the small range and tiny candle body. A break out above the Tuesday high could lead to a test of resistance at 69.90. Trading below the low could see a test of support at 66.75.