Cattle and hogs were able to not only hold ground but gain some ground back in yesterday’s trade. Can we see a bigger rally?
Oliver Sloup was on RFD-TV Monday morning to share his thoughts on the recent price action in the grain and livestock markets.
Live Cattle
Technicals (June-M)
June live cattle futures opened higher and ran on the open but peaked out mid-morning and retreated back to finish the day near our pivot pocket, 172.90-173.425. Resistance was tested and held, keeping it intact from 175.70-176.40. We would look at this as a potential sell zone. On the flip side, support from 169.00-170.00 is what we would see as a near term buy zone. Right smack dab in the middle, there’s not a lot of conviction.
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 36,976. Historically, we would look at this as a fairly neutral position.
Feeder Cattle
Technicals (May- K)
May feeder cattle futures were able to rally back into our pivot pocket yesterday, we’ve outlined that as 238.90-240.275. If the Bulls can chew through and close above this pocket, we could see additional relief propel prices closer to 245.00. On the support side, 232.625-264.675 is the pocket the Bulls want to defend. Yes, that’s an incredibly wide pocket, but that’s what happens when we sell of nearly $30 in just a few weeks time.
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)
Trendline support was tested and on the brink of giving way yesterday, but it was able to be defended into the close, which could help aid some recovery in today’s trade. That support pocket that we’ve outlined in previous reports remains intact, 101.00-101.50. The Bulls will want to see yesterday’s low hold and ideally see a close back above 103.00-103.50. We’ve had a relatively bearish view on hogs recently, but at these levels we like the risk/reward to the upside. Again, a break and close below yesterday’s low would neutralize that bias.
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.
