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Is the cattle rally out of gas?

Published on: 23:39PM Jan 23, 2018

Cattle Commentary:  Cattle continued to rally in Tuesdays session, following Mondays close above trendline resistance.  April futures finished the session up .925 at 124.90, trading in a range of 1.40 on the day.  March feeders were up 1.375 at 147.20, trading in a range of 2.35.  Weather in areas of the Midwest have been given credit for supporting the market as performance could see a set temporary setback.  Talk has been circulating of higher cash trade this week, as it would with a higher futures price.  We’ve now seen the fat cattle close higher for 7 of the last 8 sessions, we continue to feel that this is an opportunity to be proactive if you are a bull or a bear.  If you are a bull, you want to reduce, if you are bearish look at legging in to the sell side.  This is the top end of the range and though we could breakout, we have a hard time recommending to pulling the trigger on the buy side at the closing prices.  Keep in mind that there is a Cattle on Feed report out on Friday.

 

PM Boxed Beef                      Choice                      Select

Current Cutout Values:         206.85                      200.16

Change from prior day:        1.78                            .64

Choice/Select spread:          6.69

 

Cattle Technicals

 

Live Cattle (April)

 

April live cattle are pressing right up against the next significant resistance pocket which comes in from 125.175-125.45, this pocket represents the January 4th highs and a key Fibonacci retracement level derived from the August lows to the November highs.  If the market achieves a conviction close above resistance, we could see the market extend towards the contract highs of 130.10 made on November 6th.  A failure to breakout and close above resistance will lead to long liquidation and a healthy correction from the recent run higher.  The first area of 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 finished the session towards the high end of the day’s range but are having trouble getting additional momentum above technical resistance.  We see first resistance from 147.70-147.875, this represents the 100-day moving average and the recent highs.  This was also significant support on November 20th and the breakdown point to start December.  There next level above there is just a stones throw away at 149.40.  A failure to achieve a conviction close above resistance leaves the market vulnerable to long liquidation which could press 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.

 

Lean Hog Commentary & Technicals (April)

 

Front month futures finished the day higher, but the more active April contract finished the day down .45 at 74.675, trading in a range of 1.35.  We have been talking about the lack of juice left in the grape recently, meaning the risk/reward favors the bears fundamentally and technically.  It appears that is starting to hold true as fundamentals and technical soften.  The market made a run at first support today but managed to hold, that continues to stay intact 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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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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