Livestock Futures Trade Update for January 23, 2020

Meats Market Update

Meats Market Update

Livestock Futures Commentary

Live Cattle (February)

February live cattle traded in another tight range, treading water on the 50-day moving average at 125.85, close to the middle of the recent range. The market is starting to look and feel a little heavier, the funds were relentless in adding through the end of the year but seem hesitant to get much more aggressive at these levels. If we see cash soften up we could see the board break below the low end of the range, 124.55-125.10, sparking a wave of long liquidation. Cash traded started to pick up yesterday, the bulk of it coming in at 124. Yesterday’s cold storage report showed beef stocks at 481.012 million pounds, within the range of estimates.
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Firday’s Cattle on Feed estimates are as follows: On Feed: 102.2, Placements: 103.4, Marketings: 105.2

Resistance: 127.225-127.90***

Support: 124.55-125.10***, 123.125-123.85****

 

Feeder Cattle (March)

Feeder cattle broke below the 50-day moving average, an indicator that we have been using as a pivot point. The weaker price action opened the door to our next technical support pocket, we have had that defined as 142.85-143.125. If you’re bullish the market, this is the spot to consider buying. If you’re halfway skeptical, patience is king. This support pocket has been tested and held a handful of times over the last month, each time a level is tested the weaker it becomes. A break below here could opened the door for a whoosh lower. Our next support pocket comes in from 139.25-140.25.

Resistance: 146.85-147.975****

Pivot: 144.275

Support: 142.85-143.125***, 139.25-140.25****

 

Lean Hogs (February)

Consolidation continues to be the name of the game. The longer it continues, the more it favors the bear camp. The bulls need to see a close back above 68.00-68.225 to encourage a run back at the significant 70 handle. A failure to get back out above 68 keeps the bears in control and likely leads to a retest of the December lows at 65.40, below that is the August lows of 63.675. Yesterday's Cold Storage report showed pork stocks at 580.904 million pounds, near the top end of estimates.

Resistance: 68.00-68.225**, 70.00-70.40***, 73.95-74.35****

Support: 65.40-66.50****, 63.675**

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