Livestock Roundup Weekend Edition (1.21.18)
Jan 21, 2018
Cattle Commentary: Cattle futures gave back some of the weeks gains on Fridays session despite the lack of cash development. February live cattle finished Friday down .10 at 121.925, this after trading in a range of 1.80. For the week, Feb fats were up 4.425, trading in a range of 5.30. The now more active April contract finished Friday down .90 at 122.65, trading in a range of 1.725. For the week, April fats were up 3.05, trading in a range of 4.35. March feeder cattle finished Friday down 1.75 at 145.55, trading in a range of 2.975. For the week, March futures were up 2.80, trading in a range of 5.775.
Cash trade didn’t pick up steam until after the futures close on Friday, the bulk of action came in at 123 and 195 dressed, this was up 3 from last week for both. This will certainly shake things up to start the week as it is higher than many were expecting. Fridays Commitment of Traders report showed funds have a net long position of 72,065 futures, this is down slightly from the previous week of 72,251. Funds increased their Feeder cattle position slightly to a net long of 7,209 futures.
Cattle Technicals: Live cattle and feeder cattle marched higher last week, hitting our resistance pockets defined by trend lines from the November highs, prior price points, moving averages, and retracements. The inability to break out led to some long liquidation. Despite the higher cash, we feel those resistance points in last weeks report provide an opportunity for the bulls and the bears. If you are bearish, that is the point you want to think about legging in on shorts. If you are bullish, consider reducing at these points. From the purely technical side of things, the bears have a good risk reward scenario here with risk being defined by a breakout above resistance (not that far away), the opportunity is to the bottom end of the range. Lower highs and lower lows has been the trend since the contract highs in early November. We will have our technical levels out in Monday’s Livestock Roundup. You can sign up for a trial of 1 or all 5 of our daily commodity reports by clicking this link.
Lean Hogs: Lean hog futures finished Fridays session under some pressure but saw gains on the week. February finished up .55 at 72.30, trading in a range of 2.25. The now more active April contract finished the week 1.275 higher at 75.675, trading in a range of 1.90 (Tuesday’s session marked the highs and lows on the week). Strong demand and cash has been the catalyst for bulls over the past several weeks, but some are suggesting that that trend is limited, we happen to be in that camp as well. We have seen contract highs in front month futures but there has been a lack of conviction and follow through with those moves. If this continues to be the case, we could see long liquidation come into the market. Fridays Commitment of Traders report showed funds increased their net long position by 1,009 contracts, putting them at 65,427 futures. We will have our technical levels out in Monday’s Livestock Roundup. You can sign up for a trial of 1 or all 5 of our daily commodity reports by clicking this link.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.