Cattle Gap Higher
Jan 22, 2018
Cattle Commentary: Cattle futures gaped higher this morning on the back of a higher cash trade after the futures market closed on Friday, coupled with some minor weather concerns in areas of the Midwest. The bulk of the cash trade came in at 123 live and 195 dressed, this was up 3 from the previous week. Front month February futures finished the day up 1.775 at 123.675, trading in a range of 1.05. The more active April live cattle futures finished the session up 1.275 at 124.00, trading in a range of .775 on the day. March feeder cattle finished the day up .325 at 145.925, trading in a range of 1.15. We do have a Cattle on Feed report out on Friday, so we could see some position squaring ahead of that; we will start having estimates out by midweek. Fridays Commitment of Traders report showed funds have a net long position of 72,065 futures, this is down slightly from the previous week of 72,251. Funds increased their Feeder cattle position slightly to a net long of 7,209 futures. This afternoons boxed beef was mixed.
PM Boxed Beef Choice Select
Current Cutout Values: 205.07 199.52
Change from prior day: .21 (.64)
Choice/Select spread: 5.55
Live Cattle (April)
Cattle futures regained some technical strength today thanks to supportive near-term fundamentals. The close above technical resistance is encouraging for the bull camp and could lend hand to an extension towards 125.175-125.45; this pocket represents a key Fibonacci retracement level as well as the spike high from December 4th. We were friendly on fat cattle all of last week but have shifted our bias as prices have recovered to the top end of the technical range. A failure to see a follow through breakout will likely lead to long liquidation. First technical support 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 cattle failed to gain momentum above technical resistance which comes in between 146.45-146.65. This pocket represents the 50-day moving average and the 50% retracement from the August lows to November highs. Above that we see additional resistance from 147.60-148.55. If the market cannot gain traction above these key technical levels, we expect to see long liquidation come in to the market. First technical support comes in at....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)
Lean hog futures gaped lower to start the week and finished the session in similar fashion. Front month February futures closed .30 lower at 71.775, this after trading in a range of .625 on the day. The more active April contract finished down .35 at 75.15, trading in a range of .575. We know that stronger cash and good demand had helped offer support to the market over the last month, but we continue to feel that there is little gas left in that tank over the short term. If the market continues to fail against technical resistance, we expect to see long liquidation press April futures down to first support which 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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