Livestock Futures Commentary
Live Cattle (April)
Livestock futures were under pressure yet again in yesterday’s session as the risk-off mentality came back into play. After the livestock markets closed, the outside markets stabilized with stocks rallying as much as 2% off the lows. Grains initially opened firm on this but have given up gains as stocks retreat in moderate fashion. Watching price action this week, it seems clear that broad-based money flow is the driver. If outside markets can hold ground and rally today, we think that would offer some support to the Ag markets. Keep in mind that today is also the end of the month, also playing a role in money flow. Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed to you each day.
On the technical landscape, the chart is unquestionably bearish, but if you’re trying to squeeze more juice out of this grape, you’re facing down a high risk of a meaningful relief rally. Our final downside target at 118.975 was not fully achieved, but if you’ve been short or want to be long, you don’t want to be picky after what we’ve seen transpire over the last week.
Resistance: 124.55-125.10***, 127.90-128.55***
Support: 118.975****, 116.70****
Feeder Cattle (March)
March feeder cattle made new lows for the move, testing and holding our support pocket from 133.25-134.20. This pocket represents a key retracement, derived from the contract lows in September to the recent triple top highs. This pocket also contains the gap, left from September 20th. If you have been short or want to be long, this is the spot to consider buying. As mentioned in the live cattle section, this is not a spot for shorts to be greedy, take a nice chunk of meat off the bone and be happy.
Resistance: 138.80-139.25****, 140.80-141.125**
Support: 133.25-134.20****, 130.00
Lean Hogs (April)
Lean hogs got CRUSHED yesterday, locking limit down for nearly all the active months. We would have thought we would get some sort of bid into the afternoon, but it never came. The RSI is now at 24.24, below the level we were at when we bottomed in August. While futures fell, the Index gained .66 to 62.40, putting Feb futures below the cash index. With recent price action, trying to find meaningful technical levels is like having a 4-year old play pin the tail on the donkey.