Livestock Roundup (3.22.18)
Mar 22, 2018
LEJ8: .625 at 118.325, trading in a range of .975
LEM8: 1.15 at 108.525, trading in a range of 1.70
GFJ8: 1.875 at 138.10, trading in a range of 2.725
GFK8: 1.575 at 138.525, trading in a range of 2.40
Cattle Commentary: Cattle futures finally found green pastures thanks to grossly oversold conditions. The next questions would be, is this a relief rally or a sustainable rally. At the moment this is likely a relief rally due to the technical damage done over the past month; bears have taken total control (see technicals below) and there has been a buyer’s strike. As mentioned in yesterdays report, we worked with clients in reducing some hedges and selling puts against calls in the morning. The market managed to rally but not in the convincing fashion we would have liked to see, that coupled with jitters in the outside market led us to tighten things up by the end of the day. Cash trade has been 125-126 through the week so far. This afternoons cold storage report had beef at 460.276 million pounds, this compares with the average estimate of 485.5 million pounds. Tomorrows Cattle on Feed report coupled with outside market headwinds could add to volatility. estimates are for On Feed at 108.1, Placements 103.4, and Marketings at 101. Boxed beef was higher on the day.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 225.21 / 218.02
Change from prior day: / .83 / 1.63
Choice/Select spread: / 7.19
Live Cattle (April)
The market found relief today bringing the RSI back above some seriously oversold levels; the April RSI is currently at 33.48, June is still at 27.86. If the market can attract some carryover momentum into tomorrows session we could see a harder rally, there is not a lot of resistance until 120.115-120.25. This pocket represents the 200-day moving average along with the 50% retracement from the August lows to the November highs; keep in mind that near term fundamentals are a bit of a headwind. On the support side, we continue to see....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Feeder Cattle (April)
Feeder cattle have risen from the dead (for now), the RSI (relative strength index) is back above the 30 level which is typically the line in the sand for oversold; currently reading at 31.48. We are viewing this as a relief rally that could see a near term extension (outside markets may be a headwind) but the bears are in obvious control. The market reclaimed 137.75 which was the first step, the next pocket domes 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 and Technicals (June)
Lean hog futures took another bath today, June finished the day down 1.925 at 75.30, trading in a range of 2.25 on the day. As mentioned in last night’s report, yesterday was a relief rally: “We believe that today’s move higher was a relief rally, meaning that sellers will use higher prices to step back in”. The market made a sprint towards the August 30th lows which was the target mentioned yesterday, our 4-star support pocket remains 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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