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Livestock Roundup and Closing Grain Commentary (Video)


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The Livestock Roundup

Email Oliver@BlueLineFutures.com or AgHedging@BlueLineFutures.com

You can also reach us at 312-278-0500

If you missed todays closing grain comments, you can watch here: Blue Line Futures YouTube

Cattle Commentary: It felt like Groundhog Day today in the cattle complex with live cattle and feeder cattle both posting new contract highs, this after new contract highs from the previous session. Todays Fed Cattle Exchange could be described as light. There were 274 out of 1,515 head sold at 120 and it appears we may not get much more cash trade until later in the week. The bulls are clearly dominating the market with the funds continuing to buy and cattle feeders continuing to hedge, this can be seen in the rising open interest. Boxed beef has been a supporter recently too and some are suggesting we could continue to see this rise.

PM Boxed Beef Choice Select
Current Cutout Values: 207.39 193.71
Change from prior day: .95 .19
Choice/Select spread: 13.68

Cattle Technicals:

Live Cattle (December)

December live cattle continues to defy gravity, trading higher six of the last eight sessions, tacking on nearly $12 in that time span. The move higher has now shifted technical indicators from over bought to more overbought. As mentioned in yesterdays report, the cattle complex is one of a kind and the volatility often times invites more volatility. So far that has been one-sided. Yesterday we talked about the possibility of a margin call induced short squeeze helping support the market and it appears that is playing a minor role in todays price action (far from capitulation). First technical resistance comes in from 127.65-128.60. This is a wider pock which is less than ideal but working with extensions on contract highs (unchartered territory) is a technicians worst nightmare. On the support side, 123.825 is the first line in the sand the bears will want to break down below.

Resistance: 127.65-128.60***, 132.225**, 134.55****

Support: 123.825**, 121.625***, 119.175-119.85**, 117.375-117.725**

Feeder Cattle (January)

January feeder cattle made new contract highs again today for the fourth time in six sessions. The market traded to a higher high but managed to close within the resistance pocket from 160.725-160.90. This is hardly a victory for the bears playing along at home. As mentioned with live cattle, working with extensions can prove to be difficult when the markets work their way into uncharted territory (trading cattle futures is difficult enough as it is) where there is no road map of previous price discovery. The RSI is overbought but want to remind you that this is not a good enough reason to short such a strong market. Tops and bottoms are process and not points.

Resistance: 160.725- 160.90**, 165.225****

Support: 156.775-157.10**, 155.55**, 149.70-150.20***, 148.74**

Lean Hog Commentary and Technicals (December)

December lean hog futures saw some long liquidation today after the failure against yesterdays new contract highs. Cash has been steady recently, but many analysts are suggesting that we could see that flatline and even retreat. On the technical side of things, the market remains bullish for the near term. Technical resistance comes in from 68-68.175 for the December futures. On the support side, first support comes in at 65.20-65.675 which was the original breakout point above contract highs. If the market does break down below this support pocket we could see additional long liquidation, but until then the bulls remain in control.

Resistance: 69.475-69.575**, 71.70-72.10****

Support: 65.20-65.675***, 61.50-61.90***, 60.14**

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About the author


Oliver Sloup is Vice President of Blue Line Futures, a leading futures and commodities brokerage firm located at the Chicago Board of Trade. Blue Line Futures mission is to put the customer first, and that means bringing YOU the best customer service, consistent and reliable research and state of the art technology.  Oliver has been a guest on CNBC and Bloomberg, among others.  Oliver has over a decade of trading experience. Prior to Blue Line Futures, Oliver worked as the Director of Managed Futures at iiTRADER.

 

 

Contributing author since 10/6/17 

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