Livestock futures were under pressure to start the week, will we see more of the same today?
Live Cattle (December)
December live cattle continued to retreat in yesterday’s trade but were able to defend Friday’s low and our 4-star support pocket, keeping it intact for today’s trade. That pocket comes in from 184.55-185.20. We would think this will hold baring any significant risk-off trade in the outside markets, to which there are catalysts this week that could prompt that (election & Federal Reserve meeting). A failure here despite fundamentals could trigger long liquidation from funds, the next downside objective for the Bears would come in from 182.82-183.325.
Resistance: 189.47-190.075, 191.47-191.62
Pivot: 187.675-188.00
Support: 184.55-185.20, 182.82-183.325
Daily Cattle and Beef Summary
Cutout values were stronger on Monday afternoon with choice cuts .57 higher to 316.91 and select cuts 2.13 higher to 287.16. The 5-area average price for live steers was reported at 189.82, steady with the end of last week. Monday’s slaughter was reported at 120k head, 1k less than the previous week and 2k less than the same day last year.
Seasonal Tendency Update
Below is a look at historical price averages for February futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results). The chart appears to show that the first half of November is a tough time for the market to stage a meaningful rally. Whether or not that rings true this year is TBD. As mentioned for the last week, volatility is still relatively low which may make options an appealing tool to help manage risk or express an opinion in the market with limited risk.
Commitment of Traders Update
Friday’s Commitment of Traders report showed funds were net buyers of about 7.7k futures and options contracts, expanding their net long position to 100,516 contracts. That registers as the largest net long position since September of 2023.
Want to Read the full report?
Subscribe to our daily Livestock Roundup for exclusive insights into Feeder Cattle, Live Cattle, and Lean Hogs. Get access to our proprietary trading levels and actionable market biases delivered straight to your inbox—every day.
Sign Up for Free Futures Market Research – Blue Line Futures