brown calf

Does the Cattle Rally Have Legs?

Livestock Round Up

/ by BlueLineFutures | Leave a comment

Cattle futures had a strong start to the week following Friday’s Cattle on Feed report. Monday’s trade took prices back to significant resistance levels, will they hold?

Despite Bearish Fundamentals, Could Grain Markets See a Short Covering Rally?

Grain markets are higher to start the week and are knocking on the door of some very important technical levels. Could a technical breakout be enough to spark a bigger short covering rally?

Live Cattle

Technicals (June-M)

Live cattle gaped higher to start the week, following Friday’s bullish Cattle on Feed report. In yesterday’s report we noted ” If the Bulls can keep the momentum going, we could see an extension towards the 50% retracement (middle of the range) from the recent high to low, that comes in at 178.425.”. This coincidently (or not) was an area where the market started to stall out in yesterday’s trade. If the Bulls are able to chew through this pocket we could see a run back towards the 180 area, which has acted as a bit of an inflection point since the start of the year. On the flipside, a failure to take out yesterday’s high could spark some long liquidation from recent buyers at support. Ultimately, we wouldn’t be surprised to see the market settle into more of a tradable range. If this plays out, it should provide some decent shorter-term opportunities on both sides of the market.

Resistance: 178.45-178.80*, 179.825-180.75

Pivot: 172.90-173.425

Support: 169.00-170.00***

LEM2024_2024-04-23_07-46-23

Seasonal Tendencies (June Live Cattle)

Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). 

*Past performance is not necessarily indicative of futures results. 

4.22.24 LEM24_builder_11239_0_20035

Commitment of Traders Snapshot

(updated on Mondays)

Friday’s Commitment of Traders report showed Funds were net sellers of roughly 5.5k contracts. This drops their net long position to 32,301 futures and options contracts.  Historically, we would look at this as a neutral position. 

4.22.24 Live Cattle COTDET_000013

Feeder Cattle

Technicals (May- K)
May feeder cattle futures had a strong trade yesterday but ran out of gas and settled the day right in our resistance pocket, 244.85-245.425, the close was 245.175. If the Bulls can take out yesterday’s high we could see the rally push above the psychologically significant 250 level. On the flipside, a failure in today’s trade could take us halfway back of the recent rally, which would be near 239.50.

Resistance: 244.85-245.4250, 250.675-251.30

Pivot: 238.90-240.275

Support: 233.50-234.00, 231.05

GFK2024_2024-04-23_07-52-54

Seasonal Tendencies

Below is a look at historical seasonality’s for May Feeder Cattle (updated each Monday) VS today’s prices (black line).

*Past performance is not necessarily indicative of futures results.

4.22.24 GFK24_builder_72502_0_20035

Commitment of Traders Snapshot

(updated on Mondays)

Funds hold a net long position of 4,445 futures/options contracts.  

4.22.24 GF COTDET_000036

Lean Hogs

Technicals (June-M)

June lean hogs were able to gain some ground to start the week, retracing back to the scene of the crime from the April 12th breakdown point.  We’ve outlined this resistance pocket as 105.45-106.00.  If the Bulls can chew through this resistance pocket potentially, we see a retest of the highs.  However, the Funds are aggressively net long, which leads us to believe the higher velocity move could come to the downside, as we saw in the middle of April.  

Resistance: 105.45-106.00***,109.175-109.65**

Pivot:  103.00-103.50 

Support: 101.00-101.50***, 98.60-99.20***

HEM2024_2024-04-23_07-58-54

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.

4.22.24 HEM24_builder_3851_0_20035

Commitment of Traders Snapshot

(updated on Mondays)

Friday’s Commitment of Traders report showed Funds were net sellers of roughly 6k contracts, trimming their net long position to 86,645 contracts.  Looking back at historical holdings, we still considered a large net long position.

4.22.24 HEM COTDET_000015
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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Performance Disclaimer

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points that can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results all of which can adversely affect actual trading results.

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All information, communications, publications, and reports, including this specific material, used and distributed by Blue Line Futures LLC shall be construed as, or is in the nature of, a Solicitation for entering into a futures transaction. Blue Line Futures LLC does not employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.

Seasonal Disclaimer

This message and its content is intended only for the person or entity to which it is addressed and should not be shared with additional parties. Seasonal tendencies are a composite of some of the most consistent commodity futures seasonals that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.

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