Live Cattle (December)
December live cattle made another attempt at resistance, a pocket we have defined as 114.25-114.925. This pocket represents a key Fibonacci retracement and the July highs, add in an overbought RSI (relative strength index) and we could see the month and a half long rally come to an end, or take a breather at the least. First support comes in from 111.20-112.10, this pocket represents the 50% retracement (middle of the range) from the contract highs to the contract lows. Friday’s Commitment of Traders report showed funds bought another 10k contracts, putting them net long about 21k. Early estimates for Friday’s Cattle on Feed report are as follows: On feed 98.7%, Placements, 100.7%, and marketings at 100.9%.
Feeder Cattle (November)
November feeder cattle traded on both sides of unchanged only to finish the day near unchanged. The market softened up in the back half of last week and we could see that continue. 144.475-145.125 is the resistance pocket that the bears need to defend. This pocket represents Friday’s high, the 50% retracement, and the 200-day moving average. First technical support comes in from 140.975-141.35
Resistance: 144.475-145.125****, 149.275-150.15***
Support: 140.975-141.35***, 137.325-138.00***
Lean Hogs (December)
December lean hogs tried to stage a rally but ended up finishing the day closer to unchanged. We continue to believe there is longer term upside opportunity but understand that the chart is stuck in a range over the last month, call it 65 to 72. Where we closed is right in the middle of that range, so there’s not much to do in terms of getting aggressive on either side.
Resistance: 73.975-74.25***, 77.80**
Support: 70.15-71.55****, 68.325-68.75**, 67.30**, 65.50*
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