Cattle Commentary: Cattle finished the day stronger despite the lack of new news on the wire. April fats finished the session up 2.05 at 127.275, trading in a range of 2.20. March feeders finished the session up 1.725 at 149.90, trading in a range of 2.18. Cash cattle continues to be non-existent, if we don’t see anything develop by the afternoon tomorrow bulls will likely be feeling pretty comfortable going into a three-day weekend. Our bias remains bullish with an objective of contract highs. Obviously, cash developments and outside market volatility could throw a wrench into that, so we remain nimble. Boxed beef finished the day stronger.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 209.04/ 205.14
Change from prior day: /1.23/ 1.63
Choice/Select spread: / 3.90
Cattle Technicals
Live Cattle (April)
April live cattle finally caught the bid we were looking for today, breaking out above our resistance pocket from 126.125-126.30, this opened the door to our next pocket that we have had listed as 127.20-127.35. Previous resistance now becomes first support. We continue to believe that the market will make a run at the contract highs from November 6th, this comes in at 130.10. If the bulls cannot take advantage of price action and prices dip back below 126.125, look for another leg lower towards 122.50-123.30. The RSI (relative strength index) is showing 63, the most overbought levels since November.
Resistance: 127.20-127.35**, 130.10****
Support: 126.125-126.30****, 122.45-123.25***, 120.20-120.625****
Feeder Cattle (March)
March feeder cattle managed to feed off of yesterday’s momentum posting a high of 150.125 and testing the next line of resistance which we had listed in yesterday’s report as 150.25. If the bulls can chew through this level, then we would expect to see 152. We continue to believe there is a lot of strength left in this market and a run at contract highs would not be out of the question. On the flip side, previous resistance now comes in as first support, that comes in from 148.35-148.65.
Resistance: 150.25**, 151.60-151.95***, 153.95***, 158.925****
Support: 148.35-148.65**, 146.45-146.75**, 145.05-145.525**
Lean Hog Commentary and Technicals (April)
April lean hog futures made a run at technical resistance which we had listed in yesterday’s report from 71.15-71.35, the market failed to attract new buyers which invited the sellers back into the market. April futures finished the session down .95 at 69.70, trading in a range of 1.625 on the session. Though there is probably intermediate term value here the market may continue to overextend itself on the down side. 67.91 is the “last line of defense” a break and close below could accelerate the selling pressure down towards the 65 level.
Resistance: 71.15-71.35***, 72.55**, 73.10-73.60***
Support: 67.75-68.00****, 64.85-65.05***
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