Price action: August live cattle rose 50 cents to $167.675. August feeder cattle gained $1.40 at $239.175. Both markets closed nearer their session highs, hit contract highs and closed at technically bullish monthly high closes on this last trading day of the month.
Fundamental analysis: Technical buying from speculative futures traders amid fully bullish charts helped to boost live and feeder cattle futures to new for-the-move highs today. A solid wholesale beef market and firm cash cattle prices are bullish near-term fundamentals.
June live cattle futures are trading around $9.00 below last week’s average cash price of $177.94. That suggests there’s more room on the upside for nearby live cattle futures in the near term. There was light cash cattle trade reported in the south on Tuesday, at around $171. The noon report showed wholesale beef prices rose, with Choice grade up 63 cents at $305.59, while Select grade rose 44 cents to $288.21. The Choice-Select spread is presently $17.38. Movement at midday was decent at 80 loads.
Cattle futures and cash prices are likely to remain supported as grocers are still buying beef for featuring on the July 4th holiday. A bit worrisome for the cattle market bulls is average cattle weights that have crept up a bit and are now about the same as levels last year at this time. That suggests marketings may not be quite as current as a few weeks ago, but still not likely problematic.
Technical analysis: The live and feeder cattle futures bulls have the strong overall near-term technical advantage. Prices are in uptrends on the daily bar charts. Live cattle bulls’ next upside price objective is to close August futures prices above solid resistance at $172.00. The next downside technical objective for the bears is closing prices below solid technical support at $162.00. First resistance is seen at today’s contract high of $167.475 and then at $169.00. First support is seen at today’s low of $166.325 and then at this week’s low of $165.40. The next upside price objective for the feeder bulls is to close August futures prices above technical resistance at $245.00. The next downside price objective for the bears is to close prices below solid technical support at $230.00. First resistance is seen at today’s contract high of $239.85 and then at $241.00. First support is seen at today’s low of $237.30 and then at $236.00.
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