Livestock futures gapped higher to start the week, this on the back of a friendly cattle on feed report and a revision to Friday’s headline suggesting China canceled the U.S. farm field trip. On feed and marketings were inline with expectations, placements were at 91, 3% below the average estimate. On the China news, it was reported this morning that the U.S. canceled it and both parties would be looking to reschedule it. The fact that this much weight was put on a farm visit is laughable and the pull back proved to be a great buying opportunity.
Live Cattle Futures Commentary
Live Cattle (April)
April live cattle gaped higher today, taking prices into our next resistance pocket, 116.60-117.425. This pocket represents the gap from August 9th. The market is not only against resistance but also approaching the most overbought levels in recent months.
Resistance: 115.45-115.75***, 116.60-117.425***
Support: 113.95**, 111.60-112.25**, 109.375-110.175****
Feeder Cattle Futures Commentary
Feeder Cattle (November)
November feeder cattle took out resistance with conviction today as shorts look to cover. Friday’s Commitment of Traders report showed funds shot roughly 6,000 contracts, a rather large short position for funds. The market has rallied hard since the beginning of the month, taking the RSI (relative strength index) to levels not seen since April.
Support: 137.325***, 134.85-135.15***
Lean Hogs Commentary
Lean Hogs (December)
December lean hogs managed to claw back losses from Friday’s irrational selloff, following a headline suggesting the China cancelled their U.S. farm field trip. The headline triggered algos, which triggered irrational selling. Hindsight is always 20/20 but we were on the phone with clients right away for that one.
Resistance: 70.60**, 72.70**, 80.00****
Support: 66.75-67.125**, 64.20**