Livestock Roundup (6.5.18)
Jun 05, 2018
LEQ8: 1.75 at 104.20, trading in a range of 2.45
LEV8: 1.65 at 107.05, trading in a range of 2.10
GFQ8: 1.50 at 146.35, trading in a range of 2.625
GFU8: 1.925 at 147.525 trading in a range of 2.675
Cattle Commentary: Cattle futures started the day mixed, fishing below yesterday’s closing lows before coming up empty and rallying. There has not been anything significant on the news wire for what seems like a life time. With that said, we are expecting to see cash activity pick up and maybe come in at a premium to last weeks trade. For this reason, along with technicals, we came in to today’s session friendly but used today’s price action to reduce that risk. On the feeder cattle, the chart is agnostic as we wait for higher prices to sell and lower prices to buy. We are expecting both live cattle and feeders to revert to a more range bound trade which should present some good opportunities to be nimble.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 227.58 / 205.85
Change from prior day: / .01 / (.40)
Choice/Select spread: / 21.73
Live Cattle (August)
Yesterday’s 4-star support pocket from 101.90-102.40 offered opportunity for the second straight day regardless if you’re bullish or bearish. This was a pocket for bears to reduce and bulls to buy. The trip below yesterday’s low followed by the inability to gain momentum invited buyers back to the market with the hopes of seeing a firmer cash trade this week. The market got back out and closed above yesterday’s highs which bodes well for the bull camp. 105.20-105.95 is the big resistance pocket we are looking at for the rest of the week. This would be a pocket for bulls to reduce and bears to sell. As mentioned in previous reports, we feel that the market will settle into more of a range which will present opportunities to patient traders on both sides.
Resistance: 103.20**, 105.20-105.95***
Support: 101.90-102.40****, 97.625-98.20****
Feeder Cattle (August)
August feeders staged an outside day (trading outside of yesterday’s range) with the final trade going off in between the 100 and 200 day moving average. If the bulls can get out above today’s highs in tomorrow’s session, then we would expect to see a run back towards 148. From there we think the market will struggle to achieve a sustainable breakout. If the market cannot get traction and closes back below 145.50, we would expect to see....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)
In yesterday’s report we outlined our 3-star support as 74.975-75.20, that level was tested early as futures gaped lower on the open. The bulls were able to defend this pocket which sparked a round of short covering from yesterday’s session. July futures finished the session down 1.10 at 76.825, trading in a range of 1.95. Today’s price action and our thesis of a rangebound trade suggests that we could see the market work higher into the back half of the week. First resistance tomorrow 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.
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