BrokersEDGE Futures trading Newsletter 11-29-17 Livestock recap, Live Cattle, Lean hogs

Cattle Commentary: Cattle futures again started the day mixed to lower but again found buying interest towards the noon hour. February live cattle ended the day up 1.00 at 126.675, this after trading in a range of 1.125 on the session. January feeder cattle ended the day up 1.30, finishing at 155.80 after trading in a range of 1.355. Todays Fed Cattle Exchange yielded 0 sales on 967 head; 117 and 118 were passed on. Looking at the developments this week, or lake thereof, it is likely we see cash near 120 and possibly higher. If we don’t see things change over the next day and a half, shorts should error on the side of caution to avoid a late Friday trade. We have seen this a few times recently and it is usually makes Mondays a little tougher for the bear camp.

PM Boxed Beef Choice Select

Current Cutout Values: 206.55 185.84

Change from prior day: -2.08 -1.36

Choice/Select spread: 20.71


Cattle Technicals

Live Cattle (February)

The market cruised higher today, trading at its highest price in two weeks. In yesterday’s resistance Livestock Roundup, we listed 126.65-126.975 as a key resistance pocket. This was a breakout point on October 30th and also represents a Fibonacci retracement level. The market has posted higher lows for the past three months which keeps the bulls in control. Are higher highs in the picture? If the market breaks out above this resistance pocket, we could see funds extend their long position and press us back towards the contract highs of 131.95. A failure to break out will lead to consolidation and a retest towards the bottom end of the range near 123 which also represents a retracement and the 50-day moving average, an indicator we have not closed below September 6th.

Resistance: 126.65-126.975***, 127.65-128**, 131.95****

Support: 124.35**, 123.25-123.35****, 120.70***


Feeder Cattle (January)

Live cattle are right at resistance, but the feeders made a move higher and closed above our pocket from 155.10-155.55. This was a significant pocket for us as it represented the middle of the range from the October 23rd lows to the November 3rd highs. This also represents previous contract highs and the breakout point in October. The next line in the sand the bulls are targeting comes in from 156.40-156.75. This pocket represents a key retracement but also new contract highs and resistance on October 25th, 26th, and 27th. If the market continues to accel above this pocket, we could see a continuation towards contract highs. The relative strength index comes in at 54, this is near neutral.

Resistance: 155.10-155.55***, 156.40-156.75**, 158.70-159.27***

Support: 153.325-153.85**, 151.75-152.075***, 148.175****


Lean Hog Commentary and Technicals (February)

February lean hog futures finished the day down .525 to 71, this after trading in a range of 1.625 on the session. Increased weight chatter crept back into the market which led to some liquidation. The rally over the past two weeks has been impressive as the market looks poised to retest contract highs of 73.30 (despite trading softer today). First technical support from yesterday’s report held on the first test, that pocket will remain intact for tomorrows session; that comes in from 70.30-70.675. On the resistance side it’s the same story. In yesterday’s report we had 72.45, that will remain intact.

Resistance: 72.45**, 73.30****, 74.50-75**

Support: 70.30-70.675***, 69.15**, 68.30-68.475***


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