Livestock Roundup (5.23.18)
May 23, 2018
LEM8: .525 at 105.425, trading in a range of 1.475
LEQ8: 2.25 at 102.90, trading in a range of 2.65
GFQ8: 2.775 at 143.50, trading in a range of 3.275
GFU8: 2.45 at 143.25, trading in a range of 3.10
Cattle Commentary: Cattle futures caught some strength today with front month fats being the laggard to the deferreds and feeders. Cash trade has been nonexistent this week but will likely drift lower yet again before it is all said and done. The wide basis and hopes that the US could see an uptick in demand from China has led to some enthusiasm this week, but we still have no substantive details regarding the trade rumors. Commerce Secretary Wilbur Ross will be in China next week, so we expect to hear more soon. There is a Cattle on Feed report due out Friday at 11am cst. Early estimates are for on feed to be 104.9%, placements at 90.9%, and marketing’s at 105.9%. Not only do we have big fundamental news looming, we also are at some pivotal technical levels (see below). Yesterday’s Cold Storage report came in at 471.5 million pounds, this was up 2.9% from last year and up 1.6% from the previous month. Typically, we see declines this time of year. Boxed beef was mixed today with the choice/select spread widening.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 230.08 / 205.04
Change from prior day: / .73 / (.82)
Choice/Select spread: / 25.04
Live Cattle (June)
June live cattle chewed through first resistance at 105.40 but were halted against our next resistance pocket from 106.05-106.15. This has been a big technical level for us for the last two months. If the bulls can achieve a close above here, perhaps we see an extension towards 108.10-109.025. From here we feel the bulls will struggle to pick up significant momentum. On the support side of things, the first pocket remains intact 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)
After a lackluster session yesterday, August feeder cattle caught fire, forging their way above our 4-star resistance pocket which we had outlined as 143.00-143.45. This move higher has certainly neutralized the chart, but that’s it. The bulls have more work to do before we could say with conviction that this is a new bull market. If the bulls can sustain this price action, their next target would be....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 broke out above first resistance near 74.00 but faded against the Monday highs and 50 day moving average which came in from 75.35-75.45. The inability to get follow thorugh momentum sucked some air out of the market but June still managed to finish up 1.275 at 74.40, this after trading in a range of 1.975. Yesterday’s Cold Storage report came in at 641.4 million pounds, this was up 8.7% from last year and up 5% from last month. This was a bigger jump than we typically see for this time of year, but the market seemed to shrug it off. The bears are in control of the chart, but....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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