Cattle and lean hog futures rebound on Tuesday. Are the tides beginning to shift?
Live Cattle
Technicals (April- J)
April live cattle futures continued to consolidate within our support and resistance levels, shown in the chart below. It had been feeling like the market was building up for a bigger directional move, but with the shot clock starting to wind down in April futures and volume pick up in June, our optimism is wanning, not to mention bearish seasonal tendencies coming into play (June live cattle seasonal chart below). The sideways trade keeps technical levels intact for tomorrow’s trade. Next week will be taking a more focused look at June futures. If you have questions about that beforehand, please reach out to the trade desk, we are monitoring all contracts we just have a limited time to write each day (and don’t want to bore you to death).
Boxed beef was firm yet again with choice cuts 1.71 higher to 310.59 and select cuts .72 higher to 299.60. Daily slaughter was reported at 122,000 head, about 4.5k 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 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 were able to gain some ground back on Tuesday but it wasn’t enough to repair some of the technical damage that has been done over the last week. The 20-day moving average (purple line in chart below) continues to be monitored closely, a continued failure there keeps the Bears in the driver’s seat with a potential downside objective coming in sub-250.
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)
Lean hog futures were able to defend our 4-star support pocket which helped prices snap back on Tuesday, not just erasing Monday’s losses, but also losses from the back half of last week’s trade. The snapback brought prices up to our pivot pocket from 85.50-86.05 which will be watches closely in today’s trade, this pocket has been an inflection point multiple times dating back to last Summer. It happens to also represent the 50% retracement, or the middle of the range from the highs of the years to Friday’s low. If the Bulls can chew through this hurdle, it could fuel another rally back towards the recent highs.
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.
