Livestock Roundup (5.14.18)
May 14, 2018
LEM8: -3.00 at 104.625, trading in a range of 2.225
LEQ8: -2.30 at 102.125, trading in a range of 2.125
GFQ8: -3.425 at 140.475, trading in a range of 2.90
GFU8: -3.00 at 140.975, trading in a range of 2.60
Cattle Commentary: Live cattle and feeder cattle both gaped lower and didn’t make much of an attempt to close it. Prices for all contracts finished the session near the lows of the session after what we would consider a bit of a technical breakdown (see technicals below). As mentioned in yesterday’s report, the strong close on Friday was likely short covering on the assumption that the lack of cash trade would lead packers to pay up; that was not the case. Cash came in at 122 Friday evening in Tx, Ks, Ne, Wy, and Co. This compares to the 126 we saw in the previous week. This week’s cash trade will likely be critical in setting the tone for the rest of the month. We would not be surprised to see cash continue to work a little lower. If we do see cash work lower, we could still see futures stay rangebound as they have for the last month.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 232.12 / 209.12
Change from prior day: / 1.15 / .43
Choice/Select spread: / 23.00
Live Cattle (June)
June live cattle finished the day limit down as the slip in cash trade ignited long liquidation to start the week. Despite the sharp decline today, we think this offers value for the near term. The trend is your friend, and that trend has been a sideways trade from 104.50-106.50 (give or take) for the last month. If the bulls can defend technical support, we would expect to see the market work back towards the 106.05-106.75 pocket which represents a key retracement and the 50-day moving average. If the bulls are not able to hold the lower ends of the recent range which we defined last week as....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Feeder Cattle (August)
The trend is your friend until the end when it bends, and that trend has been lower highs and lower lows for the last month in the August feeder cattle futures. Our 3-star support from last week was tested and has so far held, that comes in from 139.95-140.375, this pocket represents a key retracement for the year as well as previously important price points. We were working with clients in this pocket to reduce shorts and look long (depending on their bias). On the resistance side of things, the bears remain in control until a close back above....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 gaped higher to start the week but closed off the session highs. June futures finished the session up .775 cents at 75.875, this after trading in a range of 1.15 for the day. First technical resistance this week comes in from 75.95-76.50, this pocket represents a key retracement for the year as well as the 50-day moving average and today’s highs. A close above this pocket will likely open the door for an extension towards....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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