Cattle Futures Attempt a Breakout
Oliver Sloup was on RFD-TV with Scott the Cow Guy yesterday afternoon, sharing his thoughts on the recent action in grain and livestock markets.
Live Cattle
Technicals (April- J)
April live cattle had an impressive day on Thursday achieving their highest close since November 2nd, which is just below our resistance pocket from 189.10-190.275. This pocket (sorry if we sound like a broken record) represents the top end of the recent range as well as the gap from October 23rd. If the Bulls can chew through and close above here, we believe it could extend the rally into the mid-190s. Obviously, there are prices to the puzzle that need to fall into place to keep this in the realm of possibilities, the two major ones being a stronger cash trade and the second being the world not ending.
Yesterday’s weekly export sales report showed net sales of beef at 14,000 MT for 2024 were up 14 percent from the previous week, but down 10 percent from the prior 4-week average.
Yesterday’s 5-area average price for live cattle was reported at 182.38. Daily slaughter was reported at 122k head, down 1k from last week and about 3k from the same day last year. Cutout was firm with choice cuts up 1.70 to 306.61 and select cuts up 1.17 to 296.26.
Resistance: 189.10-190.275***
Pivot: 187.30-188.05
Support: 186.00-186.50*, 182.60-183.45
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Seasonally we start to see April futures top out, but if you’ve been watching cattle at all over the last year you know that seasonals tendencies tend to have had a lower correlation this year.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed Funds were net buyers of about 8k futures and options contracts, extending their net long position for the sixth consecutive week, now sitting roughly 55k contracts long. Typically, we would view this as a relatively Neutral/Bullish position. This is about half of the length they had when prices peaked last Fall.
Feeder Cattle
Technicals (April- J)
April feeder cattle had an extremely impressive trading day on Thursday. In case you’re checking the quotes, you’re right, they weren’t up all that much, but considering the strength we saw in corn it was impressive to finish in positive territory. In yesterday’s report we noted that we have a bullish bias in live cattle and bearish one for feeders, which revolves around the risk of a relief rally in corn and seasonal tendencies. The 20-day moving average has been widely discussed for the grain markets this week, it just so happens to be in play for feeders too as it aligns with trendline support. A failure to defend support could trigger technical selling town towards the 50-day moving average near 248, which also represents some previously important price points dating back to October.
Resistance: 260.65-260.80***
Pivot: 255.60
Support: 253.85-254.25, 251.97-252.60*, 247.15-248.50
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Historically, this isn’t the best time to get supper bulled up on Feeder Cattle, but time will tell.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Funds expanded their net long position in feeder cattle to 9,991 futures and options contracts. This was the ninth straight week of Funds adding to net longs which puts them at their largest net long position since the end of September.
Lean Hogs
Technicals (April- J)
There was an unbelievable amount of green on the screen in Thursday’s trade, across all asset classes. One of the only things that wasn’t green was April lean hogs as they struggled to regain ground above the 20-day moving average and what was previously trendline support (now resistance). A continued failure to find their footing could keep the pressure on with a near term downside objective of 82.40-82.80.
Yesterday’s weekly export sales report showed net sales of pork at 36,400 MT for 2024 were up 12 percent from the previous week and 9 percent from the prior 4-week average.
Resistance: 89.00-89.05**
Pivot: 85.50-86.05
Support: 83.60-84.40, 82.40-82.80*
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line).
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed funds expanded their net long position to 63,064 futures and options contracts, up roughly 15k from the previous week. This was the eight straight week that Funds were net buyers.
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