Cattle futures were able to stage an impressive relief rally in yesterday’s trade but are approaching resistance. Will the Bulls be able to keep the momentum going?
Live Cattle
Technicals (June-M)
June live cattle futures were able to surge higher in yesterday’s trade, achieving the highest close in about two weeks. Yesterday’s rally took prices right into our resistance pocket which we’ve outlined in recent reports as 175.70-176.40. If you had bought support over the last week, this may be a spot to consider reducing that exposure. If you’re bearish, it may present a good risk/reward setup to the sell side. With that said, if the market does chew through the upper end of that resistance pocket, it could extend the rally to the 178 neighborhood.
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 chew through and close above our pivot pocket from 238.90-240.275 which keeps the door open for further relief towards 245. We see that as a crucial inflection point for the market that could set the tone for prices for the next few weeks.
Resistance: 243.75-245.00, 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 hog futures shipped back higher midmorning but retreated back near unchanged by the close. Trendline support continues to hold which bodes well for some relief to the upside from these levels. A break and close below yesterday’s low of 102.175 would neutralize that bias. A close above 104.20 could trigger a move back to 105.45-106.00. This pocket represents previously important price points as well as the 50% retracement of the recent move.
Resistance: 105.45-106.00*,109.175-109.65
Pivot: 103.00-103.50
Support: 102.175**, 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.
