March: Will the Livestock Rally Continue?
Livestock futures had a strong finish to last week’s trade, will that strength carry into today’s trade?
Check out Oliver Sloup VP of Blue Line Futures on RFD-TV, at 9AM CT!
Live Cattle
Technicals (April- J)
April live cattle futures were able to defend trendline support which dates back to the December lows. Friday’s rally took prices within a stone’s throw of the top end of the range which comes in from 189.10-190.27. This resistance pocket also represents the gap from October 23rd. If prices are able to chew through and close above this pocket, it could spark another move into the mid 190’s. With that said, we feel that this is an opportunity to manage risk if you have long exposure, whether that be on paper or physical.
Resistance: 189.10-190.275***
Pivot: 187.30-188.05
Support: 184.45-185.00*, 182.60-183.45
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Seasonally we start to see April futures top out, but if you’ve been watching cattle at all over the last year you know that seasonals tendencies tend to have had a lower correlation this year.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed Funds were net buyers of about 8k futures and options contracts, extending their net long position for the sixth consecutive week, now sitting roughly 55k contracts long. Typically, we would view this as a relatively Neutral/Bullish position. This is about half of the length they had when prices peaked last Fall.
Feeder Cattle
Technicals (April- J)
April feeder cattle were threatening a break below trendline support and the 20-day moving average last week but were able to defend that and rally into the weekend. That support pocket is moving higher to start the week and now comes in from 253.85-254.25. On the resistance side, the Bulls want to get out above the recent highs from 260.65-260.80 to spark another move higher. Corn and beans are higher in the early morning trade, if we do see short covering there into Friday’s USDA report, that could act as a headwind for feeders.
Resistance: 260.65-260.80***
Pivot: 255.60
Support: 253.85-254.25*, 251.97
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Historically, this isn’t the best time to get supper bulled up on Feeder Cattle, but time will tell.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Funds expanded their net long position in feeder cattle to 9,991 futures and options contracts. This was the ninth straight week of Funds adding to net longs which puts them at their largest net long position since the end of September.
Lean Hogs
Technicals (April- J)
April lean hogs have had a nice move higher to start the year, but with prices nearing significant resistance and an RSI in overbought territory, it may be a point in time for the market to take a breather and consolidate, if not retrace some of the recent run higher.
Resistance: 89.00-89.05**
Pivot: 85.50-86.05
Support: 83.60-84.00, 82.67-82.80
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line).
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed funds expanded their net long position to 63,064 futures and options contracts, up roughly 15k from the previous week. This was the eight straight week that Funds were net buyers.
