Livestock futures were on a rollercoaster last week, will we see more of the same or will prices start to settle into a range?
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Live Cattle
Technicals (June-M)
June live cattle futures were higher in the back half of last week’s trade, but it lacked conviction given the “good news” from the USDA on Wednesday. We think the lack of conviction may come on the back of lingering concern about future negative headline risk coupled with slower economic growth and consumer data in the US. Over the last several week’s we’ve been in the camp that we could be setting up for more of a rangebound trading environment, which could create some great shorter opportunities on both sides of the market. Friday’s Commitment of Traders report showed Funds net long just 33,620 contracts. We see that as a very neutral position.
Resistance: 178.45-178.80*, 179.825-180.75
Pivot: 175.80-176.20
Support: 172.90-173.425* 169.00-170.00*
Lean Hogs
Technicals (June-M)
June lean hogs continued to bleed lower in yesterday’s trade settling Friday’s day just a hair above our support pocket from 98.35-98.625. We’ve been in the bearish camp over the last few weeks but feel like this would be a spot to start neutralizing that bias as we could see some reprieve in the short term.
Resistance: 103.00-103.50***, 105.45-106.00***
Pivot: 101.00-101.50
Support: 98.35-98.625***
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 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.
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