Livestock Roundup (5.30.18)
May 30, 2018
LEM8: 3.00 at 106.125, trading in a range of 3.275
LEQ8: 3.00 at 104.45, trading in a range of 3.375
GFQ8: 3.35 at 148.325, trading in a range of 4.70
GFU8: 3.175 at 147.90, trading in a range of 4.50
Cattle Commentary: Cattle futures were mixed in the early going but caught a big bid in the afternoon as fat cattle finished limit up, dragging the feeders with them. This morning’s Fed Cattle Exchange resulted in the sale of 225 out of 449 head, all of which came in at 110. We are expecting to see/hear activity pick up on the cash side as we move closer to the weekend. Outside markets regained strength after yesterday’s “scare”. End of the month position squaring may also be a factor as we head towards the last few trading days. Boxed beef was firm today with choice and select both up a decent amount in the face of some analysts calling for a top.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 228.68 / 204.38
Change from prior day: / 1.12 / .73
Choice/Select spread: / 24.30
Live Cattle (August)
The move above the recent highs and the 50-day moving average today was more or less the “water is warm” sign for the intermediate term which encouraged buyers to step in until we went limit up. We would anticipate seeing this momentum carry over into tomorrows session with 105.375 being the next line in the sand, this level represents a key Fibonacci retracement that is derived from the November highs to the April lows. A conviction close above this pocket would likely extend the rally towards 107.75-107.80. This pocket represents the 100-day moving average and the 50% retracement from those November highs to April lows. The RSI (relative strength index) is currently at 55.36, this is neutral in our mind but the highest level since February.
Resistance: 103.20-103.45**, 104.675-105.375****, 106.50-106.55***
Support: 100.375-101.10***, 97.625-98.20****
Feeder Cattle (August)
We often compare price and technicals to a wrecking ball and a skyscraper, the more times price hits a level, the less significant it becomes. 145.50 has been a big level for us over the last week as it represents the 200-day moving average and the 50% retracement from the February highs to the April lows. Feeders knocked on that 145.50 door for the third consecutive session and it blew wide open. The breakout 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 (July)
Lean hog futures managed to close higher for their fifth consecutive session with July finishing up 1.325 at 80.175, this after trading in a range of 1.425. The recent rally has brought the RSI (relative strength index) to 61.37 which is the highest level since we peaked in January. There is significant resistance in 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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