Last Trades:
LEQ8: -.075 at 102.35, trading in a range of 1.30
LEV8: -.075 at 105.825, trading in a range of 1.225
GFQ8: -.475 at 145.625, trading in a range of 1.225
GFU8: -.35 at 146.325, trading in a range of 1.25
Cattle Commentary: Cattle futures traded both sides of unchanged today in what was an extremely slow day outside of the first and last 30 minutes. Today’s Fed Cattle Exchange sold 306/306 head at 106, this put the markets on the low of the session. The low number of sales invited some buyers to take a chance into the afternoon hours. After the close, we got additional cash trade in KS at 106. This compares to last week’s trade where we saw the bulk of cash coming in from 108-110. We will be keeping an eye on the outside markets this week as volatility continues to pick up, this can have an influence on money flow in commodities. We remain optimistic on prices towards the bottom end of the range
PM Boxed Beef / Choice / Select
Current Cutout Values: / 215.30 / 200.88
Change from prior day: / (1.53) / (.69)
Choice/Select spread: / 14.42
Tech Talk
Live Cattle (August)
Live cattle futures searched for stops below the bottom end of the recent range but couldn’t gain enough bearish momentum to break the market down. The inability to breakdown encouraged some buyers to step in and take a stab at buying the low end of the range. The bulls need to see some positive price action in the back half of the week to make us feel more comfortable holding long into a weekend where uncertainty will likely linger. If the bulls cannot reclaim 103.725 on a closing basis before the close, we could see some long liquidation.
Resistance: 103.75**, 104.90**, 105.375-105.525****
Support: 101.65-101.90***, 100.05-100.40****
Feeder Cattle (August)
It was ground hog day in the feeders with prices again ping-ponging in between the 50 and 10 day moving average (145.05 and 146.40 respectively). This tight pocket also contains the 50% retracement (middle of the range) from the February highs to the April lows. As far as directional conviction for feeders go, we are waiting for the market to budge off of this pivot point. A break lower could accelerate things towards 142.175-143.00, a point at which we would like to buy. A break above opens the door to 148.00, a point at which we would consider selling.
Resistance: 147.95-148.475**, 150.275-150.75***
Pivot: 145.50
Support: 145.05-145.225**, 142.175-143.00****
Lean Hog Commentary and Technicals (August)
Lean hog futures saw some follow through momentum to the buy-side today, August futures finished the day up .475 at 75.225, trading in a range of .95 for the day. The White House this morning announced that they may soften their stance with regards to China and trade, but a lot of uncertainty remains with Mexico and Canada as well. First technical resistance tomorrow comes in from 75.65-75.825, a break above this pocket opens the door for a run towards 77.00-77.25.
Resistance: 75.65-75.825***, 77.00-77.25***, 77.70-78.30
Support: 74.00-74.15**, 72.45-73.275****, 70.10-70.55***
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