Cattle futures press onward and upward in Wednesday’s trade. Is the gap from October going to finally fill?
Live Cattle
Technicals (April- J)
My wanning optimism in live cattle after Tuesday’s trade may have been what the market needed to spur an impressive rally on Wednesdays as April futures settled at their highest price since October and are just a stone’s throw away from filling the illusive gap near 190.25. If the Bulls can chew through this pocket and cash continues to firm, the next upside objective for the Bulls would be the origin of the October breakdown point, near 193.60. Keep in mind that time is winding down on the April contract and trade volume is shifting to June, which only traded about 300 contracts less than April yesterday.
Yesterday’s afternoon cutout report was mixed with choice down 77 cents to 309.82 and select up 1.44 to 301.04. The 5-area average was reported at184.79 which is lower, but there wasn’t a lot traded. Daily slaughter came in at 118k head, down about 8k from 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 (June Live Cattle)
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 work higher in Wednesday’s trade, trade but we still remain suspect of a moderate correction from these levels. With that said, there is some wiggle room here in the chart for some jockeying back and forth with significant resistance closer to 260 and significant support closer to 249.
Resistance: 255.60, 260.65-260.80
Pivot: 253.85-254.25
Support: 251.97-252.60, 248.00-249.00**
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 gave back some of Tuesday’s gains early in Wednesday’s trade but were able to recover back near where they opened, which is right near the 20-day moving average. Trendline support and resistance are continuing to converge which could start to setup for a more meaningful technical move. A continued failure against our pivot pocket from 85.50-86.05 will keep our bias leaning moderately bearish.
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.
