Live cattleand feeder cattle futures were able to post new high weekly closes. Are new contract highs in order?
- U.S. feeder cattle futures and deferred live cattle futures climbed to new peaks on Friday, as limited U.S. supplies continued to propel prices. Inventories of U.S. cattle dwindled to their lowest levels in decades after producers reduced their herds over the last year because drought reduced the availability of pastures for grazing.
- Weekly U.S. beef export sales for 2023 were 11,900 metric tons, down 34% from the previous week and 20% from the prior four-week average, the USDA said.
- Friday’s Commitment of Traders report showed Funds holding a net long position in live cattle to the tune of 93,546 futures/options, just about 500 less than the previous week. Broken down that is 107,004 longs VS 13,458 shorts.
Technicals (October- V)
October live cattle finished Friday’s session 42 cents lower to settle at 183.22, but for the week they were still $3.07 higher, marking a new weekly closing high for the contract. If the Bulls can keep the momentum going, new contract highs could be in order. A close back below our pivot pocket from 181.52-182.30 could neutralize some of the rejuvenated Bullish sentiment.
Resistance: 183.72-184.35***, 185.75**
Support: 178.62-179.10**, 176.20-177.25****
This year bucked the trend of the seasonal weakness in the back half of August, but yesterday was able to pick up on the Bullish seasonal tendencies.
Technicals (October – V)
October feeder cattle were able to fare a little better than live cattle on Friday, finishing the day 27 cents higher to settle at 259.15. For the week, October feeders were $4.50 cents higher, similar to live cattle, this was a new weekly closing high. This keeps the market in “uncharted territory”, which makes it extremely difficult to find the next meaningful resistance point.
Support: 253.50-254.25***, 252.60-253.00**
October feeder cattle futures have been bucking the trend of historical seasonal tendencies, see the chart below for Comparisons versus the 5, 10, 15, 20, and 30 year averages.
- Friday’s weekly export sales report showed Net sales of pork at 26,300 MT for 2023 were down 29 percent from the previous week and 13 percent from the prior 4-week average.
- Friday’s weekly Commitment of Traders report showed Funds holding a net long position of 32,022 futures/options contracts, up about 5,500 from the previous week.
Technicals (October – V)
Lean hogs rejected the 200-day moving average at the start of last week which led to additional weakness. October hogs were the weakest link on Friday, settling the day 1.30 lower to 81.52. For the week that was $1.52 lower. That took prices to our first support pocket, 80.55-81.50. We would not be surprised to see the market hold against this pocket.
Support: 80.55-81.50***, 77.57-77.80****
October lean hogs are entering a seasonally friendly time of year. See the chart below for comparison versus the 5, 10, 15, 20, and 30 year averages.