BrokersEDGE Livestock wrap up 1-16-18

Cattle Commentary: Cattle futures started today’s session on firm footing but prices faded until the final minute; literally. April live cattle rallied from 119.80 to 120.625 between 12:59 and 1:00pm cst. The final print today came in at 120.425, this was up .975 on the session. February futures finished the session up .775 at 118.15. We continue to have a friendly stance on cattle with April continuing to be our preference. There has been no cash trade to note this week, but packer bids are starting to come in at 118. The bulk of last weeks cash trade came in at 120, with dressed at 192. Boxed beef too a hit again today with many suggesting that the seasonal top is in.

PM Boxed Beef _ Choice _ Select

Current Cutout Values: _ 205.58 _ 199.89

Change from prior day: _ (2.45) _ (2.15)

Choice/Select spread: _ 5.69


Cattle Technicals

Live Cattle (April)

April live cattle continued higher to start the shortened trading week as we saw futures surge higher into the close. In our mind this was buying to cover after failing to really break down throughout the session. 120.25-120.80 was our first target, representing the 50% retracement (middle of the range) from the August lows to November highs among other indicators. The market managed to achieve a close in between which isn’t a clear breakout, but still a strong session. The next line in the san comes in at 121.55, but the more significant pocket and our intermediate term target comes in from 122.55-123.35. A failure to see follow through over the coming sessions could lead to long liquidation and would likely set up for a breakdown below 118. There is a lot of rhetoric between bulls and bears; we think it is all noise for now and will look to play a consolidated range until we see a fundamental catalyst give us a bigger technical breakout or breakdown.

Resistance: 120.25-120.80***, 121.55**, 122.55-122.95****, 123.70**

Support: 117.80-118.05****, 115.40-115.80**, 114.625-114.875**, 109.475****


Feeder Cattle (March)

March feeder cattle finished the day in similar fashion to the fat cattle as we saw a surge of buying in the last minutes of trading. 143.55 has been our target and the bulls achieved a close above which could lend hand to a continuation towards 146.45-147.50. This wide pocket contains several technical indicators including the 50 and 100 day moving average, along with the 50% retracement from the august lows to the November highs. This would be the spot to look at flattening if you’ve been long and looking at selling if you want to hedge. On the support side of things, 141.40 is the first line in the sand, this represents the 200-day moving average, an indicator that the March futures have never closed below.

Resistance: 144.425**, 146.45-147.50****, 149.15-149.40***

Support: 141.175-141.40**, 139.85-140.125***, 138.30-138.75****


Lean Hog Commentary & Technicals:

February lean hog futures finished the session up 2.10 at 73.675, a new contract high. Futures gaped higher on the open to trade in a range of 2.20 on the day. Those calling for a significant top late last week were forced to swallow their words quickly. We have been leaning towards the short side suggesting the value against contract highs seems limited. We continue to have this bias, but the bulls remain resilient as cash prices and demand have been firm over the past three weeks. The bulls would like to see more conviction on new contract high print to squeeze the shorts. A failure to get that conviction could lead to some long liquidation. First support comes in at 71.825 for the week. On the resistance side

Resistance: 74.50-75.00**, 78.50****

Support:71.825***, 69.85-70.30***, 68.30-68.475**


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