Lean hogs

Cattle futures turned lower and didn’t let up, finishing the day locked at the expanded limit. Live cattle remain in expanded limits, 4.50. Feeder cattle are in expanded limits 6.75. Cash cattle started to pick up yesterday, the bulk coming in near 112.
June lean hogs made new lows on Friday as trend-following funds continue to press the pedal to the metal. There’s not a clear indication of how things will open yet.
We do believe there is more room to the upside on the front-month live cattle contracts, but we think it may not be sustainable for another week.
Expect the volatility in the outside markets to continue to be the leader for cattle. Overtime, volatility will come back out and things will stabilize. When that happens, we think some of the best opportunities will be in cattle futures.
Cash cattle trade started to pick up yesterday, the bulk of it coming in near 113 in KS & TX. The market managed to rally on the back of this news as market participants seemed relieved that it wasn’t lower.
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.
April live cattle tried to stage a relief rally early yesterday morning but failed miserably to hold a flame. Futures continued lower into the close, making new lows for the move and coming within arm’s length of the contract lows from September.
April lean hogs fell victim to the spillover effect from the outside market turmoil but managed to hold their own better than we had anticipated. If outside markets can find their footing and stabilize at the least, we think there is an opportunity in the near term.
April live cattle traded on both sides of unchanged before finishing yesterday’s session in positive territory. The market ran up against our technical resistance pocket but failed to chew through it,
April lean hogs retreated yesterday but fell short of falling apart. The volatility (up and down) creates an emotional and irrational trading environment, so consider reducing your “normal” position sizing.