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LEJ9: .875 at 129.20 trading in a range of 1.775
LEM9: .225 at 122.80, trading in a range of 2.25
GFJ9: 1.225 at 147.525, trading in a range of 2.825
GFK9: 2.05 at 150.375, trading in a range of 3.50
Cattle Commentary: It was a roller-coaster day for cattle futures, surging high only to breakdown in the next 30 minutes. There were conflicting headlines that likely played a role into that volatility pop. The headlines went from, China walking back trade offers, to Lighthizer is headed to China at the end of the month to continue negotiations. This was lock step with the drop and end of day recovery and mirrored that of the intraday S&P chart. At the same time that these headlines were being released, the Brazilian President and President Trump were meeting, some of their discussion revolved around agricultural trade (details yet to be released). Cash trade has yet to develop this week, but expectations are for steady cash. Tomorrow’s Fed Cattle Exchange has 596 head offered.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 229.33 / 219.46
Change from prior day: / 1.00 / 1.25
Choice/Select spread: / 9.87
Live Cattle Futures (April)
April live cattle had an outside day, trading above and below the previous day’s highs and lows. Though it was a volatile session, it does little to change our stance on the technical landscape. The bears need to continue to defend resistance that now comes in from 129.95-130.45. A close above here takes us to uncharted territory. On the support side, our first pocket remains intact from 127.50-127.675, a break and close below here opens the door for a round of long liquidation, with the possibility of a move towards 124.95-125.50.
Support: 127.50-127.675**, 124.95-125.50****, 123.50**
Feeder Cattle Futures (April)
April feeder cattle got out above first resistance today, opening the door for a run at our next pocket from 148.50-149.00. This pocket represents the 50% retracement from the October highs to the December lows, along with the very top end of the recent range and other previously important price points. Tomorrow’s session will likely be pivotal in setting the down for the back half of the week.
Resistance: 147.325-147.85***, 148.50-149.00**
Support: 145.45-145.70***, 143.50-143.75***, 140.35-141.30****
Lean Hogs Futures (April)
April lean hogs ran out of some steam today, but don’t go thinking that the top is in just yet. Sure, the market is overbought, but go back and look at an April 2014 chart. The market rallied from about 94 to 128 in the patter of two months, in that time frame there were only a couple of down days and the RSI got as high as 95.50. Sometimes the best trade is staying in cash, so if you don’t currently have a position, you may want to consider sitting on your hands just yet.
Support: 68.80*, 67.525*
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