Livestock Roundup (5.29.18)
May 29, 2018
LEM8: -1.425 at 103.225, trading in a range of 1.85
LEQ8: -.60 at 101.70, trading in a range of 1.875
GFQ8: .025 at 144.95, trading in a range of 1.55
GFU8: .30 at 144.75, trading in a range of 1.475
Cattle Commentary: Cattle futures were quiet to start the day, but the selling picked up as the day progressed, primarily in the front month futures as liquidation continues ahead of first notice day. Friday’s Cattle on Feed report were inline with expectations. Cattle on Feed came in at 105.1%, Placements at 91.7%, and marketings at 105.9%. Cash trade last week was nothing to write home about with some cattle trading 110-111, this is down from the 126 we were seeing just 3 weeks ago. Because of the sharp decline in cash, there is no urgency for futures to gain grown which is why we had turned our tone to slightly bearish. We are expecting to see cash activity pick up a bit this week. Bids and offers are 110 and 115 respectively. Tomorrows Fed Cattle Exchange has 449 head offered, though it is an extremely small number, it could set the tone for the week. Political turmoil in Italy has spilled over into the US stock market; if this continues and picks up steam over night it is likely we see volatility spill into commodities.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 227.56 / 203.65
Change from prior day: / .13 / (.97)
Choice/Select spread: / 23.91
Live Cattle (August)
August live cattle made lower highs and lower lows today as prices hover around 102.40 which represents a key retracement from the highs of last November to the April 4th lows; this is our pivot point on the chart this week. Resistance above the market comes in from 103.20-103.45, this pocket represents last weeks highs and the 50-day moving average. A failure to breakout above this pocket keeps the bears in control. On the support side of things....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 nicked just above Friday’s highs but failed to breakout. 145.50-145.75 is key technical resistance to start the week, this pocket represents Friday’s high, the 200-day moving average, and the 50% retracement (middle of the range) from the February highs to the April 4th lows. Feeders hung in well relative to fats as the bulls have managed to post higher lows and higher highs for the past week and a half. Significant support in this market 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.
Lean Hog Commentary and Technicals (July)
Lean hog futures gaped higher to start the week and the bulls managed to hold those gains through the close. July futures finished the day up 1.225 at 78.775, this after trading in a range of 1.85. Fundamentalists are suggesting that the high production levels may be tough for the market to absorb. On the technical side of things, the chart looks constructive. Significant resistance comes in from 79.85-80.15. This pocket represents the 100 and 200 day moving average, along with a gap that was left on the chart from April 20th. A break and conviction close above will give the green light to....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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