Live Cattle (December)
December live cattle threatened to break lower early this morning, but the selling was met with buying within the first hour of trade. As with the recent trend, it was a slow grind higher through the remainder of the session. Technical resistance remains intact, we defined that in yesterday’s report as from 113.85-114.925. Obviously, a wider pocket than we’d like, but an important one. This pocket contains the 200-day moving average, a key retracement, and the top end of the range from July. This coupled with an overbought condition could be enough to halt the rally. Tomorrow’s Fed Cattle Exchange has 768 head listed.
Feeder Cattle (November)
Early in the session it appeared we were going to get a round of profit taking, but as with live cattle we saw the selling subside and buyers step in to take us back into positive territory. With the market posting an inside day, trading within the previous day’s range, the technicals remain little changed. If the bulls can continue to defend 145.00-145.50 through the week, we could see a run towards 149.275-150.15. With that said, the market is in overbought territory and is ripe for a healthy correction. Consecutive closes back below 145.00 could spark a round of long liquidation and take prices back towards 140.00.
Support: 145.00-145.575**, 140.975-141.35***, 137.325***
Lean Hogs (December)
Lean hog futures traded higher all day, waiting for the final seconds to push it to the limit. The market looks primed for a breakout if the bulls can achieve consecutive closes above resistance, we have defined that as 70.15-71.55. This pocket represents the 200-day moving average, trend line resistance from the contract highs, and other previously important price points.
Resistance: 73.975-74.25***, 77.80**
Support: 70.15-71.55****, 68.325-68.75**, 67.30**, 65.50*
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