Are livestock markets going to be able to buck the trend of seasonal weakness?
Live Cattle
Technicals (June-M)
June live cattle is now the most actively traded contract which is where our attention has shifted. The market has been trading water near the 20-day moving average (purple line in chart below) for the better part of the last 3-weeks. Resistance to start the week comes in from 185.85-186.625. If the Bulls can chew through and close above resistance, we could see another leg higher with 190 in the targets. On the flip side, a continued failure keeps the door open for a retest of the lower end of the recent range near 180, which also represents the 50-day moving average.
Friday’s cutout values were firm with choice cuts up 1.12 to 311.90 and select cuts .71 higher to 302.40. The 5-area average price for live steers was reported at 187.82. Daily slaughter was 113k head, which put the week to date total at 586k, about 26k less than the same period last year.
Resistance: 185.85-186.625*, 189.05
Pivot: 182.20
Support: 179.825-180.625**, 177.10
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 4k futures and options contracts, extending their net long position for the eighth consecutive week, now sitting roughly 63.3k 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 lower on Thursday but were able to stabilize on Friday. Our bias continues to lean on the bearish side with downside objectives coming in near 248-249. this pocket represents previously important price points along with the 50-day moving average. The Bulls want to see a close back above our pivot pocket from 252.60-253.85 to neutralize some of last week’s technical damage.
Resistance: 253.85-254.25, 260.65-260.80
Pivot: 252.60 253.85
Support: 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 were net sellers of about 1.5k contracts last week, the bulk of which was long liquidation. That shrunk their net long position to 10.3k contracts, which is on the larger side of historical holdings.
Lean Hogs
Technicals (April- J)
April lean hog futures were able to breakout above our pivot pocket on Friday which helped fuel additional buying activity. Upsides resistance continues to look stout from 88.00-89.00. We would not be surprised to see the market struggle to find momentum above this area. With that said, the chart still looks to favor the Bull camp with higher lows made since the start of the year. Higher highs are in jeopoardy.
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 for June lean hogs (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 little changed from the previous week, holding a net long position of 63.7k contracts.
