We have made it through the weekend, which was filled with uncertainty late last week. Outside markets are stabilizing, can livestock follow suit?
Watch us on RFD-TV, today at 9:45am CT!
Live Cattle
Technicals (June-M)
It was a risk-off day into the weekend for many markets, and live cattle were not immune. The “worst case scenario” was avoided over the weekend and many markets are showing signs of relief, perhaps that can be the same for cattle to start the week too. Support remains intact from 169.00-170.00. This is a MUST HOLD pocket. A break and close below here could trigger another wave of long liquidation. On the resistance side of things, the Bulls want to get back out above 172.90-173.425 to spur a bigger relief rally. Friday’s 5-area average price for live steers was reported at 183.93, softer than recent weeks but still pretty darn good considering the pressure in the futures market.
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 8.3k contracts. This drops their net long position to 36,76. Historically, we would look at this as a fairly neutral position.
Feeder Cattle
Technicals (May- K)
May feeder cattle futures got hit hard at the end of the week, trading to the lowest levels since December. The market traded below support from 233.50-234.00 but managed to close just above, which keeps it intact. The Bulls need to defend this pocket to have a chance at a relief rally. The first barrier to the upside comes in from 238.90-240.275.
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 6,208 futures/options contracts.
Lean Hogs
Technicals (June-M)
June lean hogs came back to reality in the back half of last week’s trade following an upside move that far exceeded our expectations. With Friday’s limit down move, prices rest near trendline support, which is derived from the origin of the rally, which took place at the very beginning of the year. If the Bulls fail to defend 101.00-101.50 it could create more technical selling. If you’ve traded lean hogs in the past, you’ve probably learned by now that this market has a tendency to overshoot, correct, and overshoot in the other direction in short order, so be sure to manage your risk accordingly.
Resistance: 105.75-106.00*,109.175-109.65
Pivot: 103.00-103.50
Support: 101.00-101.50, 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 19k contracts, expanding their net long position to 92,731 contracts. Looking back at historical holdings, this is nearing a record, that was set back in 2013 when funds were long 97,952 contracts.
