Cattle and hogs were lower in yesterday’s trade as a risk-off trade swept through many markets following a hotter than expected inflation report.
Live Cattle
Technicals (June-M)
June live cattle futures were under pressure in today’s trade, giving back majority of the relief rally that we saw in the first two sessions of the day. Some of the weakness in today’s trade may have come on the back of a risk off environment in the outside markets following hotter than expected inflation data. Yesterday’s data was on CPI (Consumer Price Index), today we get a look at PPI (Producer Price Index) at 7:30am CT. We see pretty decent support near 169.00-170.00. If the Bulls can defend this support level in the coming weeks, we would likely look at it as a good risk/reward setup to the buyside. Seasonally, the June contract has headwinds to battle against for another two weeks (ish).
Resistance: 175.70-176.40, 177.72-178.45
Pivot: 172.90-173.425
Support: 169.00-170.00***
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 sellers of roughly 6k contracts. This drops their net long position to 53,281.
Feeder Cattle
Technicals (May- K)
May feeder cattle futures traded to new lows for the move in yesterday’s trade, taking prices closer to our key support pocket from 233.50-234.00. The Bulls will want to see this pocket defended on a closing basis, a break and close below could trigger additional technical selling pressure towards 231.05.
Resistance: 243.50-244.00, 246.4-247.00*
Pivot: 238.90-240.275
Support: 233.50-234.00, 231.05
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 9,414 futures/options contracts.
Lean Hogs
Technicals (June-M)
The pressure valve was released today in lean hogs. After making new highs, prices quickly reversed and broke back lower, erasing the last three days of gains in a just a few hours. If the downside pressure persist in today’s trade we would look at 103.00-103.50 as the next downside target for bears, and a pocket that the Bulls would need to defend to prevent further long liquidation.
Resistance: 109.175-109.65**
Pivot: 105.75-106.00
Support: 103.00-103.50**, 101.15, 98.60-99.20
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 were net buyers of roughly 12k contracts, expanding their net long position to 76,928 contracts. Looking back at historical holdings, this is on the larger side of things.
