Cattle futures showed signs of weakness on Friday, will that carryover into this week’s trade?
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Live Cattle
Technicals (April- J)
April live cattle traded into the gap from October on Friday but failed to attract any new buyers at that level which led to a weaker afternoon trade. The reversal was notable, but it wasn’t enough to do any serious technical damage. Trendline support and the 20-day moving average will continue to act as support in today’s trade, 186.30-186.90. A break and close below those levels could trigger a wave of selling pressure down to the 50-day moving average (yellow line in chart).
Friday’s 5-area average price for live steers was reported at 185.15, firm with what we saw earlier in the week. Daily slaughter was reported at just 97k head, about 17k less than the same day last year.
Resistance: 189.10-190.275***
Pivot: 187.30-188.05
Support: 186.30-186.90*, 183.15-183.45
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Seasonally we start to see April futures top out, but if you’ve been watching cattle at all over the last year you know that seasonals tendencies tend to have had a lower correlation this year.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed Funds were net buyers of about 8k futures and options contracts, extending their net long position for the seventh consecutive week, now sitting roughly 59.3k contracts long. Typically, we would view this as a relatively Neutral/Bullish position. This is about half of the length they had when prices peaked last Fall.
Feeder Cattle
Technicals (April- J)
April feeder cattle attempted to rally on Friday but continued to fail against technical resistance. The marker reversed off the highs and finished below trendline support and right on the 20-day moving average, this aligned with our support pocket from 253.85-254.25. A break and close below this pocket could open the door for a dip back below the psychologically significant 250.00 level. Grains are weaker in the early morning trade which may help Bulls on the open, but we still remain suspect and believe we could see more downside pressure in the near term.
Resistance: 260.65-260.80***
Pivot: 255.60
Support: 253.85-254.25, 251.97-252.60*, 247.15-248.50
Seasonal Tendencies
Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Historically, this isn’t the best time to get supper bulled up on Feeder Cattle, but time will tell.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Funds expanded their net long position in feeder cattle to 11,527 futures and options contracts. This was the tenth straight week of Funds adding to net longs which puts them at their largest net long position since the end of September, which topped out at nearly 20k contracts
Lean Hogs
Technicals (April- J)
April lean hog futures were relatively quiet in Friday’s trade as the market continued to regain ground above what was previously trendline support. A continued failure could keep the pressure on with the next downside objective for the Bears coming in from 82.40-82.80, which represents the 50-day moving average and the breakout point from February 14th.
Resistance: 89.00-89.05**
Pivot: 85.50-86.05
Support: 82.40-82.80****
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.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed funds expanded their net long position to 65,090 futures and options contracts, up roughly 1k from the previous week. This was the ninth straight week that Funds were net buyers.
