Livestock Futures Commentary
Live Cattle (April)
April live cattle traded both sides of unchanged on Friday, before finishing the session (and the week) near unchanged. Friday’s Commitment of Traders report showed funds sold 15,759 contracts, shrinking their net long position to 51,369. Cash trade started to pick up towards the end of the week, the bulk of that coming in around 121, 1 lower from the previous week. Technical support to start the week comes in from 118.35-119.10. A break and close below here opens the door for continued fund liquidation, the next support level we see comes in at 116.70. On the resistance side, 120.125-120.30 is a pivot pocket. IF the bulls can chew through this, we could see relief take us back above 121.00. We are wanting to see a relief rally to get more short exposure on for clients, hedgers and speculators.
Resistance: 121.225-121.80***, 123.075-123.45***
Support: 118.35-119.10****, 116.70****
Feeder Cattle (March)
March feeder cattle drifted lower yesterday and continue to look technically weak. Our support pocket remains intact from 133.25-134.20. A break and close below here is the last thing the bulls want to see, there’s little meaningful support until contract lows at 126.05. On the resistance side of things, the bulls want to see consecutive closes back above 136.95-137.30, this pocket represents previously important price points and the 50% retracement from contract lows to the triple top highs at 147.75. Friday’s Commitment of Traders report showed funds were net sellers of 4,074 contracts, putting them net short 2,684 contracts.
Resistance: 138.80-139.25****, 140.80-141.125**
Support: 133.25-134.20****, 130.025-130.30**, 126.05-126.40****
Lean Hogs (April)
Lean hogs found some relief on Thursday and Friday, but there is still significant damage to repair on the chart. The volatility (up and down) creates an emotional and irrational trading environment, so consider reducing your “normal” position sizing. Resistance to start this week’s trade comes in from 67.95-68.675, the gap from January 29th. On the support side, 64.875-65.025 is the gap from Friday morning. Friday’s Commitment of Traders report showed funds bought 1,038 contracts, putting their net long position at 8,698.