Cattle futures were lower to start the week which may have been induced by a light round of profit taking ahead of what is a seasonally softer time of year.
Live Cattle
Technicals (April- J)
The suspense continues to mount as prices continue to consolidate between significant support and resistance levels. Despite the suspense, there’s not a whole lot to say that we haven’t said over the last week since prices continue to consolidate. We’ve been in the camp that the market would be able to chew through resistance and fill the gap from October 23rd, but it’s starting to feel like the little extra juice may not be worth the squeeze as seasonal tendencies start to soften up, particularly in the June contract which we’ve outlined in the seasonal chart below.
Boxed beef was firm to start the week with choice cuts up 1.84 to 308.88 and select cuts up 1.45 to 298.88. The 5-area average price for live steers came in at 185.12 and daily slaughter was reported at 111,000 head.
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 June futures soften up, 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 broke and closed below the 20-day moving average in today’s trade which doesn’t look great on the chart. As mentioned, several times over the past week, we have been concerned that the upside potential is limited due the potential for a relief rally in corn and seasonal tendencies, not to mention the outperformance at the start of the year. Previous support will now act as a pivot pocket, coming in from 253.85-254.25.
Resistance: 255.60, 260.65-260.80
Pivot: 253.85-254.25
Support: 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)
Apirl lean hogs failed to find their footing which led to further selling pressure in yesterday’s trade, taking prices back near 4-star support from 82.40-82.80 which represents the 50-day moving average as well as previously important price points, including 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.
