Livestock Roundup (5.2.18)
May 02, 2018
LEM8: -.925 at 104.90, trading in a range of 2.475
LEQ8: -.10 at 103.975, trading in a range of 1.625
GFK8: .80 at 138.70, trading in a range of 1.65
GFQ8: .80 at 144.275, trading in a range of 2.00
Cattle Commentary: Front month live cattle futures reverted to their old ways today, posting their highs for the day within the first hour of trade, only to slowly bleed lower for the remainder of the session. Todays Fed Cattle Exchange sold 413 out of 2982 head. 3 pens sold at 122.50 with 1 other pen coming in at 122.50; 121.50 was passed on for 1 pen also. Packer bids are resting at 120 but that is expected to rise with offers in the south coming in at 125. If you looked beyond June and August, the board was all green. We continue to be optimistic that the board and cash will work together in narrowing the basis. May option expiration is on Friday, that could be keeping a near term lid on things as well. Boxed beef was higher yet again this afternoon.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 227.30 / 207.88
Change from prior day: / .87 / .79
Choice/Select spread: / 19.42
Live Cattle (June)
Despite being under pressure for the first three sessions of the week, the chart still looks constructive for the near term. We have been in a nice channel of higher lows and higher highs since the bottom one month ago on April 4th. The market tested but failed against first resistance which we had listed in yesterdays report as 106.675-107.225. The bulls need to chew through this pocket and close above it to give the “all clear” signal to invite new buyers into the market. The next resistance 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 (August)
August feeder cattle found support at what we referred to as “significant support”. This pocket comes in from 142.70-143.00. This pocket represents the 200-day moving average, a key retracement level, and a minor trendline. If this support can hold then it would continue the trend of higher lows since we bottomed in early April; this would likely encourage some new buyers to step into the market. On the resistance side of things, the market needs to reclaim....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 started the day on firm ground but that gave way midday. June futures finished the session down .45 at 73.45, trading in a range of 1.55. We continue to be optimistic on futures prices with seasonal strength being a key catalyst. The cash market is up roughly 7.5% in the last week. A conclusion to NAFTA would also be a benefit for the bull camp as well. With that said, the close back below 74.00 was a little discouraging and has a caution flag up. If the market....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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