Time to buy cattle?

Published on: 00:01AM Feb 22, 2018

Cattle Commentary:  Cattle futures rolled over hard shortly after the open this morning, this was largely technical in our minds.   As we mentioned in yesterday’s report, the lack of follow through on Tuesday put the buyers on the sideline and invited long liquidation.  There was cash trade today, the bulk of it coming in at 128, this is 2 lower than the 130 we saw on Friday.  There is a Cattle on Feed report out on Friday and estimates are starting to roll in.  Estimates for On-Feed are coming in from 107-108.5%, Placements 99.6-100.1%, Marketing’s 105.5-106.1%.   The outside markets have stabilized but today’s FOMC Minutes sparked some volatility, if that volatility starts to feed on itself we could see that spill over into cattle (just something to keep an eye on).  Afternoon boxed beef was stronger yet again.

 

PM Boxed Beef / Choice / Select

Current Cutout Values: / 217.37/ 211.92

Change from prior day: /1.45/ 1.52

Choice/Select spread: / 5.45

 

Cattle Technicals

 

Live Cattle (April)

 

April live cattle opened on the softer side this morning and then accelerated lower to our first support pocket which we had outlined in yesterday’s report as 124.875-125.45.  Our bias remains bullish and this pullback was very much welcomed as mentioned yesterday.   We used today’s pullback to work with clients who reduced long exposure/started shorting yesterday.  If the market makes another run at this pocket and closes below, we would not be surprised to see the market test our next support in from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Feeder Cattle (March)

 

Feeder cattle fell out of bed today as the “buyer’s strike” led to accelerated selling through the 100-day moving average.  First support failed from 148.35-148.65 which opened the flood gates to our next support level at 146.45.  This represents the 50% retracement (middle of the range) from the August lows to the November highs.  Previous support now becomes resistance at 148.35-148.65.  From the technical perspective, the feeder chart is....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 (April)

 

It was indeed a chop fest today with April lean hogs gapping higher, only to finish near where they opened; this after trading in a range of 1.425 on the day.  First technical resistance for tomorrows session will come in from 71.15-71.35, the bears remain in control until a conviction close above this pocket.  On the flip side, we see first technical support 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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