Carnage in Cattle
Jun 25, 2018
LEQ8: -3.00 at 102.90, trading in a range of 2.00
LEV8: -3.00 at 106.40, trading in a range of 1.80
GFQ8: -3.275 at 145.925, trading in a range of 2.80
GFU8: -3.25 at 146.575, trading in a range of 2.825
Cattle Commentary: Cattle futures started the trading week under pressure as multiple bearish headlines piled up since Friday’s close. Friday afternoon the USDA released their monthly Cattle on Feed report which had On-feed at 104.1, this vs the average estimate of 103.4. Placements came in at 100.2, the average analyst estimate was for 95.6. Marketing’s came in at 105.4, the average estimate was 105.1. We also saw cash trade pick up on Friday afternoon, that ranged from 107-110, lower than what we were looking for. The cherry on top today was outside market volatility, stock indices traded anywhere from 2-3% lower. If the Asian markets open lower it could feed to continued pressure through the overnight session, which could leave the door open for another leg lower in cattle to start tomorrow. With that said, we will be looking to step in on the buyside as we continue to believe this market will be rangebound (see technicals below). Friday’s Commitment of Traders report showed managed money long 24,908 futures live cattle futures, an increase of 3,556 from the previous week. The same report showed managed money net long 1,205 feeder cattle futures, an increase of 1,622.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 217.69/ 201.89
Change from prior day: / .53 / (.13)
Choice/Select spread: / 15.80
Live Cattle (August)
August live cattle finished the day limit down which will expand them to 4.50 tomorrow. First technical support tomorrow comes in from 101.90-102.40, a break and close below opens the door for a test to 100.05-100.40. We continue to believe the market will remain in a trading range which is why we will be looking for a spot to be long the market this week. On the resistance side of things 102.90 is the first line in the sand the bulls want to reclaim. A close above here could extend the market to cover the gap which we have coming in from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Feeder Cattle (August)
Feeder cattle tested and held first support today, we have defined that as 145.05-145.50, this pocket represents the 50-day moving average and the 50% retracement (middle of the range from The February highs to the April lows. If the market sees follow through pressure over the next session or two, we could see another leg lower take us towards 142.175-143.00. On the resistance side of things, the first significant pocket comes in from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Lean Hog Commentary and Technicals (July)
Today’s theme in the markets was “risk off”. We saw pressure come into equities and commodities as trade concerns linger prompting some money managers to reduce risk ahead of next week’s holiday trade. July hogs finished the day down 1.60 at 78.225, trading in a range of 1.325. Friday’s Commitment of Traders report showed funds holding a net long position of 1,584, an increase of 2,691 futures. On the technical side of things, the market broke down below technical support today which we have had listed as 78.60-79.05, this pocket represents the 50 and 100 day moving average, along with the 50% retracement from the January highs to the April lows. The next line in the sand comes in from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
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