Cattle and Hog Futures Top Heavy?

Published on: 23:05PM Mar 13, 2019

Livestock Roundup


March 13, 2019


Last Trades

LEJ9: .075 at 126.725, trading in a range of 1.25

LEM9: .725 at 119.40, trading in a range of 1.15

GFH9: .425 at 141.725, trading in a range of 1.075

GFJ9:  .05 at 144.45, trading in a range of 1.575



Cattle Commentary:  Cattle futures finished the day little changed after trading in a more manageable range from yesterday.  Cash trade started rolling in here this afternoon with 127 being reported in Kansas and Texas.  Today’s Fed cattle exchange didn’t sell any cattle and had two pens passed on at 126.50.  Brutal weather in the Midwest could continue to hold some support in the market as we look towards the back half of the week. 


PM Boxed Beef / Choice / Select

Current Cutout Values: / 228.24 / 219.28

Change from prior day: / .02 / (1.07)

Choice/Select spread: / 8.96


Tech Talk


Live Cattle (April)


The market tried to gain ground above yesterday’s secondary breakdown point and previous support, at 127.55, representing the 50-day moving average among other previously important price points.  The inability to find momentum above there coupled with the slow grind lower for the remainder of the day is not bullish.  We think that there will be a buying opportunity in the near future, but it may get a little worse before it gets better.  A move towards 124.975-125.30 would be our target to buy on the first test. 


Resistance: 127.50-127.60**, 128.50-128.60***, 130.45-131.00**

Support:  126.25-126.325** 124.975-125.30****, 123.50**


Feeder Cattle (April)


Feeder cattle worked up against our first resistance pocket, which we outlined in yesterday’s report as 145.20-145.86.  As with the live cattle market, the lack of follow through momentum early in the day led to a slow bleed lower into the close, not a bullish  price indicator.  First support remains intact from 143.50-143.75, if that gives way we would expect the selling to accelerate. 


Resistance: 145.20-145.85**, 147.325-147.85***

Support: 143.50-143.75***, 140.35-141.30****


Lean Hogs (April)


April lean hogs worked up into our first and only resistance pocket in yesterday’s report, we listed that as 65.45-65.90, an excellent spot for longs to reduce and shorts to dabble.  The market retreated off of that pocket pretty hard, coming back to finish the day lower.  That type of reversal is not bullish and could lead to additional pressure on tomorrow’s open. 


Resistance: 65.90-66.15***

Support: 62.85**, 61.65-62.025**, 60.00-60.15***


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