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Cattle Commentary: Cattle futures finished the last trading day of the year in the red with February live cattle futures closing .70 lower at 121.625, trading in a range of 1.375 with respectable volume. For the week, February futures closed up 3.375. Cash cattle trade through the week was non-existent with bids from 118-119 and offers at 125-126. The buyers and sellers found common ground at 123 after the futures closed, this was up from 119/120 in the previous week. Colder temperatures have helped offer some support to the market as it tends to slow down the weight gain. Boxed beef was also up Friday. Fridays weekly Commitment of Traders report showed funds are net long 82,738 contracts. Keep in mind that this data is compiled through Tuesdays session.
PM Boxed Beef Choice Select
Current Cutout Values: 202.90 192.98
Change from prior day: .62 2.07
Choice/Select spread: 9.92
Cattle Technicals: On the technical side of things, we have been marking higher highs and higher lows over the last three weeks which is constructive. We are still looking for futures to make a run towards 123.35-123.70. This pocket represents a key Fibonacci retracement as well as the 50-day moving average. This was also a breakout point on October 24th and a breakdown point on December 1st. A conviction close above could encourage funds to extend their net long position and press prices towards 126.65. On the support side of things, the bulls need to defend a wide pocket from 119.85-120.70 on a closing basis. This represents the middle of the range from the August lows to the November highs as well as the 100-day moving average
Resistance: 123.35-123.70****, 126.65**, 131.95**
Support: 120.65-120.70**, 119.85***, 118.05-118.15**
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