Daily Livestock Technicals and Fundamentals (10.1.18)

Published on: 21:47PM Oct 01, 2018

Last Trades:

 

LEZ8: .45 at 119.10, trading in a range of 1.375

LEG8: .70 at 123.50, trading in a range of 1.225

GFX8: 1.025 at 159.075, trading in a range of 1.85

GFF8: 1.40 at 156.05, trading in a range of 1.75

 

Cattle Commentary:  December live cattle futures officially made it into uncharted territory today, posting new contract highs at 119.75.  The majority of the move higher was in the opening 5 minutes, the inability to find follow through in the following 20 minutes sparked a round of long liquidation.  The bulk of last week’s cash trade came in from 110.50-111.00, this was steady with the previous week.  Fundamentals have not changed much despite the firming of the chart, see the full technical breakdown below in our “Tech Talk” section. 

 

PM Boxed Beef / Choice / Select

Current Cutout Values: / 205.08 / 194.63

Change from prior day: / 1.20 / 1.19

Choice/Select spread: / 10.45

 

Tech Talk

 

Live Cattle (December)

 

December live cattle had what we would label a neutral day.  The run higher on the open was encouraging but the inability to maintain that strength through the session was a bit of a caution flag.  We had clients and prospective clients asking us what we think this means for tomorrow’s session and the honest answer is: It’s a coin flip.  If futures retreat back below 119 with some conviction, we could start to see some long liquidation, anything other than that will keep the bulls in full control.  As mentioned in our interview with RFD-TV this morning, we view pull backs as buying opportunities. 

 

Resistance: 119.75-120.10***, 121.95-122.50**

Support: 118.05-118.50***, 115.20-116.00****, 114.375-114.50**

 

Feeder Cattle (November)

 

November feeder cattle marked new contract highs but failed to get that conviction move above the psychologically significant 160 level.  If the bulls fail to get the ball rolling above here in the first half of the week, we could see a round of long liquidation take us closer towards the bottom end of the recent range which comes in near 156.  As with live cattle, the feeder cattle chart remains constructive with the path of least resistance being higher.  Pull backs will likely be buying opportunities until we start seeing consecutive closes below technical support. 

 

Resistance: 159.225-160.00***, 162*

Support: 155.525-155.70***, 152.55-152.975**

 

Lean Hogs (December)

 

December lean hogs broke out above the 200-day moving average for the first time in this contract’s life, posting the highest price since June 14th.  December futures finished the day up 1.825 at 59.75, trading in a range of 1.575.  We have been and continue to be friendly the deferred months as they continue to post higher lows and higher highs.  First resistance is the psychologically significant $60.00 level, but the more significant level is the June 13th highs of 60.75.  A breakout above here opens the door and invites momentum traders into the market. 

 

Resistance: 60.00-60.75****, 6250-62.90**, 35.275****

Support: 58.35**, 55.95**, 54.15-54.55****

 

 

 

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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.