Livestock Futures Roundup - Live Cattle, Feeder Cattle, Lean Hogs

Cattle cash trade starting to run out of gas
January feeder cattle made an early morning run higher, but those gains fizzled
February lean hogs continue slide lower
Meats Market Update

Meats Market Update

Livestock Futures Commentary

Live Cattle (February)

February live cattle started this week’s trade on softer ground but managed to firm up into the afternoon trade. Cash trade last week was mostly steady, perhaps the first sign that the cash market is starting to run out of gas, after such an incredible rally off contract lows. If the cash market does start to stall out, you can expect to see futures quickly come off the highs. The February contract is still near overbought levels which happens to coincide with a double top in prices from the contract highs in April. A failure here could trigger long liquidation from the funds. Friday’s Commitment of Traders report showed funds bought another 13,519 contracts, extending their net long position to 74,017. This week’s Cattle on Feed report could be a good reason to tighten things up and secure gains. Early estimates for the report are as follows: On Feed: 101.3%, Placements 112.7%, and Marketings at 100.0%.

Resistance: 125.775-126.30****

Support: 123.125-123.40***, 121.775-122.00**, 117.70-118.325****

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Feeder Cattle (January)

January feeder cattle made an early morning run higher, but those gains fizzled but the end of the day with futures finishing closer to unchanged. Previous support is first resistance, that comes in from 146.85-147.975, a barrier that may be too much for the bulls to overcome. On the support side of things, the market is watching 142.225-143.15. A break and close below this pocket opens the door for a “whoosh” lower, towards 139.00.

Resistance: 146.85-147.975****, 152.25-152.80**, 159.725****

Pivot: 144.50-145.00

Support: 142.225-143.15***, 138.65-139.00****

 

Lean Hogs (February)

February lean hogs continued their slide lower today as the market threatens to close the gap from September 11th, that comes in from 67.825-68.525. We think that gap will represent a buying opportunity on the first test, but the bulls will need to see it hold on a closing basis. From peak to trough, this four day sell off has amounted to 6.975, reaffirming our thought that trading hogs is not for the faint of heart.

Resistance: 71.40-71.80**, 74.15-74.55***, 75.975-76.625****

Support: 67.825-68.525****, 63.675**

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