Cattle Volatility Reaches its Highest Level in Over 2-Years

Livestock Round Up Research Posts

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Live cattle futures made new lows in yesterday’s trade which took uncertainty and volatility to its highest level in over two-years. Will seasonal tendencies be able to offer support to the market or is there more downside to come?

Live Cattle

Technicals (February – G)

Welp, it was another day that ended with “y”, which has a recently shown a strong correlation to cattle being lower.  Pardon me for trying to make humor in what has been one of the most dramatic selloffs in cattle that we’ve seen.  Seasonal tendencies have been out of whack for live cattle for majority of the year and are never a guarantee, but as you can see from the second chart below (updated today, April live cattle) this is a time of year where we’ve historically seen some support come into the market.  The CME CVOL index for Live Cattle, which measures volatility made new highs yesterday, reaching it’s highest levels since September of 2021.  The difference between now and then is that back then it was a pop and drop.  The volatility we’ve seen recently has been lingering at the upper bounds.  

Weekly export sales were beyond dismal this morning. Net sales of 200 MT for 2023–a marketing-year low–were down 98 percent from the previous week and from the prior 4-week average. 

Resistance: 168.00**, 174.75-175.25***

Pivot: 166.25

Support: 160.50-161.00**

Seasonal Tendencies

Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). 

*Past performance is not necessarily indicative of futures results. 

Feeder Cattle

Technicals (January – F)

January feeder cattle futures looked like they were going to firm but retreated to post a new closing low, though narrowly defending intraday lows that were posted on Monday.  At the current juncture, feeder cattle seem slightly more appealing than live cattle, which we don’t say all that often (from a trading standpoint).

Resistance: 223.00-224.52***, 232.20-233.50***

Pivot:  216.40-218.00 

Support: 209.00-210.00**

Seasonal Tendencies 

Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line).

*Past performance is not necessarily indicative of futures results.

Lean Hogs

Technicals (February – G)

February lean hogs just chopped around yesterday, leaving most of the technical levels unchanged from the previous day.  Weekly export sales for pork showed net sales of 25,900 MT for 2023 were up 23 percent from the previous week, but down 14 percent from the prior 4-week average. 

Resistance:  74.00-74.500***

Pivot: 71.50-72.00

Support: 67.15-67.80***, 65.40-65.67**

Seasonal Tendencies 

Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line).

*Past performance is not necessarily indicative of futures results.

Oliver Sloup, VP & Co-Founder, Blue Line Futures

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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Performance Disclaimer

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points that can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results all of which can adversely affect actual trading results.

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Seasonal Disclaimer

This message and its content is intended only for the person or entity to which it is addressed and should not be shared with additional parties. Seasonal tendencies are a composite of some of the most consistent commodity futures seasonals that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.

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