2 Minute Drill (Livestock 1/4/18)
Jan 04, 2018
Above is today's "2 Minute Drill" (1.4.18)
Below is an excerpt from yesterday evenings Livestock Roundup
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Cattle Commentary: Cattle futures were mixed today with front month futures trading lower to the deferreds higher prices; this indicates that managed money is now starting to roll some of their net long positions out. February live cattle finished the day down .475 at 122.875, trading in a range of .975 on the day. March feeder cattle were .225 lower at 146.65, trading in a range of .975 on the session. Todays Fed Cattle Exchange had 388 offered but yielded zero sales. The bulk of last weeks cash trade came in around 123, there have been calls for 1-2 higher, we don’t see much more than 1 at this point. Colder temperatures have helped offer support to the market but forecasts are turning “warmer” through some key areas which will start to help with weight gain. Boxed beef has been working higher yet again.
PM Boxed Beef Choice Select
Current Cutout Values: 208.62 199.16
Change from prior day: 3.48 2.59
Choice/Select spread: 9.46
Live Cattle (February)
February live cattle futures struggled again to get traction above our resistance pocket from 123.35-123.80. If we fail to breakout above this pocket in tomorrows session we will be looking for futures to retreat back towards 120.10-120.70; this pocket represents the 100-day moving average and the 50% retracement (middle of the range) from the August lows to the November highs. We look at this as an opportunity to reduce long exposure and leg back into some hedges. If the bulls can achieve a conviction close above resistance tomorrow there is not a lot stopping the market from running to 126.65-126.775. This pocket represents a key Fibonacci retracement along with previous highs from the failure at the end of November.
Resistance: 123.35-123.80****, 126.65**, 131.95**
Support: 120.65-120.775**, 119.85***, 118.05-118.15**
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