Cattle futures started the week sharply higher with all eyes on the outside markets in today and tomorrow’s trade and the Cattle on Feed report on Friday.
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Live Cattle
Technicals (June-M)
June live cattle futures started the week with an impressive rally back to the top end of the recent trading range. All in all, not much has changed technically as the market remains mostly rangebound. Resistance to keep an eye on comes in from 185.85-186.625. If the Bulls can chew through and close above this pocket, it could spark another leg higher. A few things we are watching (besides Friday’s Cattle on Feed report estimates) is the outside markets into and after the Federal Reserve meeting tomorrow. Nothing is expected to change in terms of interest rates, but it will be more about the guidance going forward. If rate cuts continue to get walked back and pushed further out, you could see volatility in the outside markets trickle into commodities.
Yesterday’s cutout values were firm with choice cuts 1.43 higher to 313.33 and select cuts 65 cents higher to 303.05. The 5-area average price for live steers came in at 187.47, firm with what we saw last week at this time. Daily slaughter was reported at 120,000 head, 4.6k less than the same day 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)
Feeder cattle futures were able to work back to the upside to start the week, erasing a good chunk of the selloff that we saw in last Thursday’s trade. The Thursday high will be first resistance today, that comes in at 256.90. A close above here could rejuvenate the buyers and take prices back towards the upper end of the range. On the flipside, a close back below our pivot pocket keeps the door open for a retest of support. We are leaning more into the camp of selling rallies, particularly for those that need to protect price from these levels.
Resistance: 256.90** 260.65-260.80***
Pivot: 253.85-254.25
Support: 252.60 253.85, 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 hogs had a strong finish to last week’s trade but that was unable to translate into a stronger trade to start the week. Lean hogs posted an inside day, which is just a way of saying we were within the previous day’s range. Due to that, many of the technical support and resistance levels remain unchanged in this morning’s report.
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.
