Cattle Futures Surge!
Jan 17, 2018
Cattle Commentary: Cattle futures finished strong in yesterdays session and that momentum carried over into Wednesdays trade with the front month fats (February) trading limit up at 121.1. April Live cattle lagged a bit, finishing the session up 2.50 at 122.875, this after trading in a range of 3.20 on the day. Feeder cattle joined the party with March trading up 2.075 at 146.000, trading in a range of 4.40 for the session. In our weekend report, we mentioned early cash calls for 1 lower at 119; packer bids to start the week have been mostly 118. Today's Fed Cattle Exchange had 108 out of 304 sold at 119.75 with 118 and 119.50 passed on. Boxed beef prices continued lower today as many are suggesting the seasonal top is in place.
PM Boxed Beef Choice Select
Current Cutout Values: 205.30 199.61
Change from prior day: (.28) (.28)
Choice/Select spread: 5.69
Live Cattle (April)
April live cattle marked their fourth consecutive positive close with a powerful breakout today. We have been friendly on fat cattle over the last week with our intermediate term target being achieved today, that comes in from 122.55-123.30. Some might be enthused and encouraged by the move higher, but this is an opportunity to reduce long exposure in our opinion. If you have a short thesis then this is where you start establishing a position. Sure, we could continue higher tomorrow, but we feel that there isn’t much meat left on the bone here for the bull camp. If the market fails to extend in tomorrow’s session, it is likely we some long liquidation push prices back towards....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 cattle staged a strong session but closed 1.40 off of the highs of 147.40. In yesterdays report we mentioned that the strong price action could lend hand towards a continuation towards 146.45-147.50. This is a wider gap than we typically want but there is a lot of significance in it. The market peaked at the top end of that pocket, the inability to continue higher then led to some long liquidation in the final 30 minutes of trade. For those of you that don’t use technicals, they are a great tool to help you game plan instead of being paralyzed by hope/fear. This target was an area where we would look to reduce if not flatten long exposure; if you’re a producer or have a short thesis this would be an area to consider selling against. A failure to regain ground above resistance will likely lead to additional long liquidation, the first significant support 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 & Technicals:
February lean hog futures finished the session down 1.175 at 72.725, trading in a range of 1.175 on the day. Strong cash and demand have helped support futures over the last three weeks, but we continue to be skeptical of how much more juice is in this grape. We continue to have a short biased against these levels, but bears must be cautious as the chart is undoubtedly constructive. If the market starts to see softer fundamentals it is likely we see long liquidation press prices lower with the first line in the sand coming in at....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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