Livestock Futures Retreat to Start the Week
In Case you missed it..
Oliver Sloup, Vice President and Co-Founder of Blue Line Futures was on RFD-TV yesterday morning sharing his thoughts on the grain and livestock markets with Scott the Cow Guy.
Live Cattle
Technicals (April- J)
April live cattle futures pulled back to start the week and although it may have seemed like a lot, it wasn’t enough to erase all of Friday’s gains. Trendline support coupled with the 20-day moving average will continue to act as significant support through the week, that comes in from 185.45-186.32. A break and close below could spur some long liquidation from Funds, who have been net buyers for six consecutive weeks. On the resistance side, the Bulls want to not only see support hold, but they’ll want to see a close out above resistance from 189.10-190.27 to spark another leg higher. The next upside objective would come in near 195.
Yesterday’s 5-area average price for live steers was reported at 183.30. Afternoon boxed beef was mixed with choice cutes 1.02 higher to 306.30 and select cuts down .57 to 295.17. Daily slaughter was reported at 116k head, down 6k from last week and about 9k less than the same day last year.
Resistance: 189.10-190.275***
Pivot: 187.30-188.05
Support: 186.45-186.32*, 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 futures pulled back in today’s trade, giving back a portion of Friday’s rally. Today’s pullback didn’t do any technical damage, but we are still concerned that resistance could be too stout, especially if we continue to see short covering in grains into Friday’s USDA report. Support comes in from 253.85-254.25. A break and close below this pocket could spark a further retracement via long liquidation from Funds who have been net buyers for nine consecutive weeks. First support below that comes in at 251.97.
Resistance: 260.65-260.80***
Pivot: 255.60
Support: 253.85-254.25*, 251.97
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)
April lean hogs fell flat against resistance which led to a sharply lower trade, taking prices back near our pivot pocket from 85.50-86.05. This pocket represents the upper bounds of trendline support derived from the January lows. A break and close below this level could drop prices back near 84 and change, which represents previously important price points along with the 20-day moving average.
Resistance: 89.00-89.05**
Pivot: 85.50-86.05
Support: 83.60-84.40, 82.67-82.80
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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