Livestock Futures Commentary
Live Cattle (April)
April live cattle continued to drift lower yesterday, an indication that funds are likely continuing to liquidate more of their net long position. All eyes are on support from 115.925-116.70, this pocket represents the gap from September 20th and a key retracement from the September lows to contract highs. With the RSI in oversold territory, we would look for this pocket to hold some relief on the first test, a spot for bulls to try buying. Ultimately, we continue to believe that rallies are opportunities to sell. Cash cattle started to pick up yesterday, coming in at 120. Today’s Fed Cattle Exchange has 413 head listed. Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed to you each day.
Resistance: 118.675-119.05***, 121.225-121.80***, 123.075-123.45****
Support: 115.925-116.70****, 112.70-113.55***
Feeder Cattle (March)
March feeder cattle ran up to our pivot pocket yesterday but failed to attract new buyers to stage another leg higher. We have had that pivot pocket defined as 136.725-137.25, this pocket represents previously important price points and the 50% retracement from contract lows to the recent triple top highs. Significant support remains intact from 133.25-124.20, a break and close below could be a big blow to the bull camp. We continue to believe that rallies are opportunities to sell.
Lean Hogs (April)
April lean hogs retreated yesterday but fell short of falling apart. The volatility (up and down) creates an emotional and irrational trading environment, so consider reducing your “normal” position sizing. We believe that lean hogs can continue to work higher, but it will not be a straight shot so be prepared to handle the volatility.