Cattle futures were contained in Monday’s trade. Lean hogs fought back after a weaker start to the week.
Live Cattle (December)
December live cattle futures were mixed to start the week, leaving many of the technical support and resistance unchanged from yesterday. As mentioned in our interview with RFD-TV yesterday, we wouldn’t be surprised to see the market settle into more of a range with the top end coming in near 189 and the low end coming in near 184 and change. A breakout above or below could accelerate and extend the move in the corresponding direction.
Resistance: 189.47-190.075, 191.47-191.62
Pivot: 187.675-188.00
Support: 186.075-186.40, 184.225-184.55
Daily Cattle and Beef Summary
Cutout values were firm again on Monday with choice cuts 2.21 higher to 322.86 and select 2.01 higher to 296.21. The 5-area average price for live steers was reported at 187.61 which we’d call steady to with the end of last week. Monday’s slaughter was reported at 120k head, in line with the previous week but about 5k less than last year.
Seasonal Tendency Update
Below is a chart of the February 2025 live cattle contract (black line) compared to price averages over the last 5, 10, 15, 20, and 30 years.
*Past performance is not necessarily indicative of future results.
Volatility Update
Live cattle volatility remains relatively low which may present opportunities for those looking to hedge/manage downside risk.
Commitment of Traders Update
Friday’s Commitment of Traders report showed funds were net buyers of over 10k contracts through October 15th, expanding their net long to 88,301. That is the largest net long position since October 3, 2023.
A Mixed Start to the Week in Livestock Markets
Cattle futures started the week on softer footing. Lean hogs saw initial weakness, but buyers stepped in to take prices back to a new contract high.
Lean Hogs (December)
December lean hogs looked like they were going to roll over yesterday morning, but buyer stepped back in which took pries back near the top of last week’s range. 78.70-78.97 continues to be the barrier to keep an eye on. A close above there could extend prices towards April’s contract high, 79.60. Despite the strong backdrop, we lean on the cautious side here.
Resistance: 78.70-78.97, 79.60
Pivot: 77.22-77.72
Support: 75.25-76.00, 73.85-74.07, 72.00-72.85***
Seasonal Tendency Update
Below is a chart of the December 2024 lean hog contract (black line) compared to price averages over the last 5, 10, 15, 20, and 30 years.
*Past performance is not necessarily indicative of future results.
Commitment of Traders Update
Funds have been on a buying spree for about 4-months, taking the net long position to the largest since April, now at 84,679. We are getting to the area of Fund length where risk of long liquidation and a high velocity move that could come with it may outweigh the upside potential left, at least in the near term.
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