Cattle and hog futures were able to post impressive gains in Wednesday’s trade. More upside to come?
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Live Cattle
Technicals (October – V)
October live cattle futures were able to chew through first resistance yesterday which opened the door for an extension near our more significant resistance pocket from 182.675-183.275. As mentioned in previous reports, we view this pocket as a good risk/reward setup to play it back to the short side. A break and close above this pocket would neutralize that bias.
- Resistance: 182.675-183.275*
- Pivot: 181.175-181.50
- Support: 179.35-180.50**, 176.35-176.22
Daily Livestock Summary
Yesterday afternoon’s cutout values were weaker with choice cuts down 2.05 to 314.88 and select cuts down .11 to 300.50. Daily slaughter was reported at 122k head, right in line with last week and last year. The 5-area average price for live steers was at 187.04, on light volume.
Weekly Export Sales: Net sales beef were reported at 28,100 MT for 2024–a marketing-year high–were up noticeably from the previous week and up 99 percent from the prior 4-week average.
Below: Daily chart of October live cattle which illustrates the accelerated selling pressure following the breakdown of trendline support. Also included is a set of Fibonacci retracements from the high to low of the recent move.
Seasonal Tendencies
Below is a look at prices averages for October live cattle over the last 5, 10, 15, 20, and 30 years. As referenced many times last month, August can be a tricky year to stage a meaningful rally. Those headwinds start to subside some when we turn the calendar over to September. *Past performance is not necessarily indicative of future results.
Feeder Cattle
Technicals (September- U)
September wheat futures were able to continue their relief rally yesterday, settling the day right in the middle of our first resistance pocket, 244.20-244.90. If the Bulls can chew through and close above here, we could see an extension towards 248.775. We continue to be in the camp that rallies may be selling opportunities, particularly for those who need to protect downside risk.
- Resistance: 248.675*, 252.50-253.55
- Pivot: 244.20-244.90
- Support: 238.97-239.15, 236.57-236.75, 233.05-233.95*
Below: Daily chart of September feeder cattle that illustrates the accelerated selling pressure that took place following a break below trendline support. Also included is a set of Fibonacci retracements from this year’s trading range.
Seasonal Tendencies
Below is a look at prices averages for November feeder cattle over the last 5, 10, 15, 20, and 30 years. We are using November so you can see the longer trend as opposed to the front months which are on a much shorter time frame. As referenced many times last month, August can be a tricky year to stage a meaningful rally. Those headwinds start to subside some when we turn the calendar over to September, but that strength has often been short lived. *Past performance is not necessarily indicative of future results.
Lean Hogs
Technicals (October – V)
Lean hogs came out of the gate with a strong move higher yesterday, getting out above our pivot pocket which accelerated the buying back to trendline resistance and our resistance pocket from 75.30-76.25. If the market can close above this pocket it could set the table for a bigger rally with a potential target back above 80.00 in the cards.
- Resistance: 75.30-76.25, 77.325-77.50, 78.55-78.70*
- Pivot: 73.90-74.45
- Support: 72.42-72.475, 68.05-68.10****
Weekly Export Sales
Net sales of 20,900 MT for 2024–a marketing-year low–were down 40 percent from the previous week and 30 percent from the prior 4-week average.
Below is the daily chart for October lean hogs. The market has been consolidating between trendline resistance and a previously important inflection point near 74.
Chart of Interest
Below is a look at price averages for October lean hogs over the last 5, 10, 15, 20, and 30 years. The chart below illustrates some seasonal weakness into the middle of August, but then that turns more friendly through the remainder of the contract’s life. Important to remember that past performance is not necessarily indicative of future results.
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