Live cattle futures were nearly limit down on Friday and nearly limit up on Monday, as mentioned in yesterday’s report and in our interview with RFD-TV, the outside markets will be the driver of price action in the near term. Stocks firmed into the afternoon (after the cattle close) and are holding minor gains this morning, a potential tailwind for cattle this morning. We will likely keep daily ranges wide, so be sure to manage your risk and/or reconsider position sizing. The increased volatility diminishes the importance for some of the key technicals, so take the charts with an extra grain of salt until things re-calibrate. At the end of last week, in yesterday’s report, and in our interview with RFD-TV, we reiterated the idea that June has a great deal of value at these levels.
Feeder cattle futures will likely be unable to avoid the influence of the outside markets, near term. Though we remain optimistic on the June/August live cattle, we are less optimistic about Feeders. Not to say they can’t continue to recover, but we think the recovery will eventually be met with more resistance.
April lean hogs finished yesterday’s session in positive territory, but it was a really disappointing session for the bulls, considering the bulk of commodities saw sharp(er) recoveries alongside the outside markets. We think there are better near-term opportunities outside of lean hogs, in this market environment.