Livestock Roundup (6.26.18)
Jun 26, 2018
LEQ8: -.55 at 102.35, trading in a range of 1.725
LEV8: -.625 at 105.80, trading in a range of 1.575
GFQ8: .125 at 145.90, trading in a range of 1.375
GFU8: UNCH at 146.50, trading in a range of 1.25
Cattle Commentary: Cattle futures were pretty tame today with fats and feeders finishing mixed by the closing bell. The lack of follow through pressure after a limit down move yesterday has us believing there is value near these levels. In yesterday’s report we had mentioned that outside market volatility (stocks) added to the pressure from softer cash and a bearish Cattle on Feed report Friday. Global equity markets stabilized today which put commodity traders at ease. We did see some cash trade at 108 in Western Nebraska for three weeks out, there were also reports of a small cash trade in Iowa. Tomorrows Fed Cattle Exchange has a whopping 306 head offered. Show lists are down sharply this week and there are continued concerns/questions about how the global trade tensions will affect the livestock markets.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 216.83 / 201.57
Change from prior day: / (.86) / (.32)
Choice/Select spread: / 15.26
Live Cattle (August)
August live cattle traded moderately lower after failing against the 50-day moving average at the open, that came in at 103.725. The market proceeded to slowly grind lower through the day, making it down to our 3-star support pocket from 101.90-102.40. In recent reports we have mentioned this as an area we see value in, and so we were working with clients in reducing shorts and dipping the toes in on the long side. One of the biggest benefits of looking at technicals is that it gives you a game plan ahead of time as opposed to acting on emotion. If the bulls cannot defend this pocket it will likely open the door for....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 finished the day near the unchanged market after ping ponging between the 50 and 100 day moving average (145.05 and 146.475 respectively). This tight pocket also contains the 50% retracement (middle of the range) from the February highs to the April lows. As far as directional conviction for feeders go, we are waiting for the market to budge off of this pivot point. A break lower could accelerate things towards 142.175-143.00, a point at which we would like to buy. A break above opens the door to....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 (August)
We are moving our commentary into August futures as that is the most active month. August lean hog futures finished the day up 1.025 at 74.625, trading in a range of 2.05. Was this just a short lived short covering rally or substantial is the questions. For now, we feel that it might be enough to get the market back to the top end of the range, but a call for a breakout move higher would be premature. Concerns linger with regards to trade and how that could affect exports. Right now, we export roughly 25% of production with China, Mexico, and Canada accounting for half of that. Significant support comes into the market from....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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