Cattle futures were volatile in Monday’s trade, gaping lower on the open, trading back higher, then to finish the day near the lower end of the day’s range.
Live Cattle
Technicals (June-M)
June live cattle gapped lower yesterday morning but found support and marked a low just 12 cents above our 4-star support pocket. The market was able to fill the gap by midmorning, but then began to retreat again into the afternoon trade. 179.825-180.625 remains the pocket to watch through the remainder of the week, if that gives way it could accelerate the selling pressure.
Yesterday’s daily livestock summary showed cutout values 17 cents higher for choice cuts and select cuts 49 cents higher. The 5-area average price for live steers was reported at 189.56 which is firm with what we’ve seen in recent weeks.
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 Fund positioning was little changed, holding a net long position of 62,391 futures/options contracts. Broken down that is 84,973 longs VS 22,582 shorts.
Feeder Cattle
Technicals (April- J)
April feeder cattle futures broke lower yesterday, rallied back to trade meaningfully higher, only to finish the day near the low end of the range. Trendline resistance remains intact as the market continues to mark lower highs and lower lows. The bearish tilt to our bias remains intact. 247.15.248.00 is going to be a big pocket to keep an eye on, a break and close below that could accelerate the selling pressure.
Resistance: 256.90** 260.65-260.80***
Pivot: 252.60 253.85
Support: 247.15-248.00****
Seasonal Tendencies
Below is a look at historical seasonality’s for May Feeder Cattle (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 hold a net long position of 11,453 futures/options contracts.
Lean Hogs
Technicals (June-M)
June lean hogs saw a sharply higher start to the week after defending trendline support late last week. Despite yesterday’s move higher, we think that the downside risk from these levels could outweigh the upside potential. A breakout above the recent highs would negate that thesis.
Resistance: 103.00-103.50****
Pivot: 101.15
Support: 98.60-98.80, 97.42-97.80
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 62,877 contracts. Looking back at historical holdings, this is on the larger side of things.
