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Cattle futures surge

Published on: 00:43AM Feb 02, 2018

Cattle Commentary:  Cattle futures had a gap and go day, catching a lot of market participants off guard causing a rush to cover.  Trying to point the finger to a specific fundamental catalyst for today’s move after the previous days session seems like a fool’s errand and will likely lead you to be chasing your tail around for a bit.  April live cattle finished limit up at 125.925, trading in a range of 2.657.  March feeders also finished limit up at 150.075, trading in a range of 4.125.  Yesterday’s cattle inventory report showed an increase from the previous year, topping some expectations.  Export sales this morning came in at 25,200 metric tons.  Weekly steer weights were reported down 5 lbs.  Boxed beef prices were mixed at the end of the day.

 

PM Boxed Beef / Choice / Select

Current Cutout Values: / 209.60 / 204.54

Change from prior day: / (.46) / .22

Choice/Select spread: / 5.06

 

Cattle Technicals

 

Live Cattle (April)

 

April live cattle closed on technical support yesterday and seemingly spring boarded off of that in today’s session as shorts began to hit the exits.  That support pocket from 122.475-122.75 was very significant in our minds and the inability to break down below coupled with todays price action could lead to a trend change in favor of the bulls.  We have been using the top end of the range to work the short side but today’s trader may lead to a trend change.  First resistance 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.

 

Feeder Cattle (March)

 

March feeder posted their highest price since December 1st.  As mentioned earlier in the week, the market has been making higher highs and higher lows.  If tomorrows trade sees follow through buying, that would likely confirm a technical breakout.  A break and close above 150, likely opens the door to additional buying towards 153.95.  We have been using the top end of the range to work on the sell side but the velocity of today’s trade changes things and puts that on the back burner for now.

 

Resistance: Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Support: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 & Technicals (April)

 

April lean hogs saw some spillover strength from the cattle markets.  April futures finished up .475 at 72.725, trading in a range of 1.05.   Export sales this morning came in at 27,300 metric tons.  Strong demand is going to be a key catalyst as we have seen the supply side keep a lid on things recently.  The move higher today was “encouraging”, but the close off the highs and back below technical support was not so much.  If the market cannot form a base here to round out the week, we expect to see futures work towards....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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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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