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Livestock Roundup (4.3.18)

Published on: 23:31PM Apr 03, 2018

 Last Trades:

LEJ8: -.30 at 112.10, trading in a range of 1.575

LEM8: -1.20 at 99.75, trading in a range of 2.275

GFJ8: -1.225 at 130.65, trading in a range of 2.55

GFK8: -1.475 at 130.90, trading in a range of 2.75

 

Cattle Commentary:  It’s the same story, just another day in the cattle world.  Futures continued lower as funds continue to liquidate their net long positions.  Cash bids this morning started to surface at 117 and 118, those were met by sellers and bids started dropping; the bulk of today’s cash trade came in at 117.  This slow bleed lower continues to offer false hope to any longs left in the market, bulls want to see more panic and capitulation to start forming a bottom, tops and bottoms are a process not a point.  Margin call selling continues to add additional pressure into the close.  Buying the close and selling the open has been the recent trend, we will see if can continue into tomorrow’s session.  Boxed beef was lower on the day. 

 

PM Boxed Beef / Choice / Select

Current Cutout Values: / 219.68 / 209.33

Change from prior day: / (.12) / (1.17)

Choice/Select spread: / 10.35

 

Cattle Technicals

 

Live Cattle (June)

 

June live cattle filled the gap at 99.75 that was left on the charts exactly 1 year ago, we listed this as first support in yesterdays report.  A break and close below opens the door to 96.375, this would be a full retracement of the March lows; we have been using those lows and the November 7th highs to derive our retracement levels.  At this point we would like to be more aggressive on the buy side, until then we recommend treading lightly.  The chart is a technical graveyard and the bulls have A LOT of work to do before you can claim a bottom is in.  If you want to be long the market that’s fine but be mentally prepared to see lower prices.  The other option would be to buy options (no pun intended), there are some attractive opportunities in that market.  When we do get a relief rally we are expecting....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 are officially in uncharted territory with today’s session taking out the June lows at 131.50.  Using the continuous charts, we would look at 129.05 being the next line in the sand.   The RSI (relative strength index) is currently at 24.15, which is “oversold” but is not as oversold as we were just two weeks ago.  We do not advise trying to catch a falling knife, bottoms are a process not a point.  First technical resistance for the rest of the week will come 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)

 

June lean hogs finished the session down 2.00 at 71.55, trading in a range of 2.65 on the day.  Despite the continuous pressure, the RSI (relative strength index) is only at 30 which is just the beginning of what is generally accepted as “oversold”.  Tariff talk continues to bring pressure on the market and we could see that extend as funds are now net short the market.  We believe there will be an opportunity to the buy side in this market, but you will want to use patience.  The next significant level we are looking at doesn’t come in until....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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