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Livestock Roundup (4.11.18)

Published on: 22:34PM Apr 11, 2018

Last Trades:

LEM8: -.30 at 101.80, trading in a range of 2.175

LEQ8:  .30 at 102.60, trading in a range of 1.65

GFK8: .675 at 135.95, trading in a range of 2.20

GFQ8: .35 at 140.975, trading in a range of 2.10


Cattle Commentary:  It was the same story, just another day in the cattle markets.  We saw another firm bid on the open, only to be sold into by funds for the remainder of the day.  Buy the close, sell the open has been the trend and we are looking to see if that will continue tomorrow.  Cash trade started to pick up this afternoon with the bulk of it coming in at 117 in TX.  Today’s Fed Cattle Exchange sold 509/3,818.  We still believe we could see cash firm up a tad this week, the big question is: will futures respond accordingly?  April futures closed higher but the steady cash did little to support June.  We are on the fence about what the market wants to do.  The chart is ugly (see technicals below) but the futures discount to cash is wide.  Though we think the risk is to the upside in the very near term, the conflicting fundamentals and technicals have us treading lightly. 


PM Boxed Beef / Choice / Select

Current Cutout Values: / 213.07 / 200.61

Change from prior day: / (.44) / (.72)

Choice/Select spread: / 12.46


Cattle Technicals


Live Cattle (June)


Lower highs and lower lows have been posted every day this week which isn’t the prettiest thing in the world for those that are long the market.  As mentioned above, the higher opens this have led to false hope with prices fading each afternoon.  The recent price action is eerily similar to what we have seen for the better part of the last 7 weeks; a slow bleed lower.   If the bulls cannot get something going soon we could see the market roll back over.  First meaningful 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 (May)


May feeder cattle posted an inside day, trading within the previous days range.  The market is catching its breath as it consolidates and treads along a key Fibonacci retracement level at 135.75.  The bulls want to see a close back above 138.575-138.95 to encourage a run back above the 140 handle; this would give the advantage back to the bulls.  A failure to hold ground here will lead to another breakdown.  A close back below 133.55-134.00 will accelerate the selling and take us to....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 breached yesterday’s lows but couldn’t spark any additional panic selling.  June futures finished the day up .975 at 76.025, trading in a range of 1.75 for the day.  The bulls have created a nice foundation for forming an intermediate term bottom but need to see a close back above 76.925-77.00 for a confirmation.  A failure to see a conviction close above this pocket keeps the bears in control and will likely encourage additional pressure, pressing prices back below....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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