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LEV8: .55 at 109.27, trading in a range of 1.35
LEZ8: .70 at 113.125, trading in a range of 1.20
GFU8: .80 at 149.475, trading in a range of 2.175
GFV8: .675 at 149.575, trading in a range of 1.90
Cattle Commentary: Cattle futures caught a bid early on but struggled to find conviction above technical resistance (see full technical breakdown below). Perhaps outside market volatility was a headwind and held futures back from their full potential today, but it was at least encouraging to see prices stabilize with the global equity “selloff”. Today’s Fed Cattle Exchange was a skunk, with no sales out of the 488 head. Cash trade this week has been nearly non-existent in terms of quantity, we are looking for the bulk of cash to come in steady to higher with last week’s trade of 111.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 209.95 / 200.61
Change from prior day: / .31 / (.66)
Choice/Select spread: / 9.34
Live Cattle (October)
We were optimistic on live cattle to start the week after holding technical support perfectly, but we were really wanting to see more of a springboard off it which would have encouraged additional momentum buyers into the market. Futures tested our 109.55 level but failed to retain ground above here into the close. This pocket represents the 50% retracement from the November 7th to the May 17th lows. The bulls must achieve consecutive closes above here in hopes for another leg higher towards the top end of the recent range which we have defined as 112.15-112.50.
Resistance: 110.75**, 112.15-112.50***, 114.075-114.75***
Support: 107.50-107.90****, 105.125-105.475***
Feeder Cattle (October)
Feeder cattle made a move higher but fell just short of our first technical resistance level at 150.40. If the bulls cannot break out above this level, it will mark lower highs which could take us to lower lows, confirming the head and shoulders pattern we have been discussing for the last two weeks. On the support side of things 147.45-147.65 is the pocket the bears need to chew through. Just below that is 146.40 which represents the 50% retracement from the February highs to the April lows and the 100-day moving average. A break and close below here likely leads to a whoosh lower with the first objectives being 145.15 and 144.25.
Resistance: 150.40**, 153.20-153.45****, 155.375-156.00***
Support: 147.45-147.65***, 146.40**, 145.15**, 144.25***
Lean Hog Commentary and Technicals (October)
October lean hogs fared better than we would have expected today, finishing the session up .875 at 52.725, trading in a range of 1.50. As far as the fundamental and technical outlook goes, not much has changed over the last 24 hours. Supply concerns continue to weigh over the market and the technical are just not all that encouraging for higher prices. The bulls want to see stabilization via consecutive closes above 53.40-54.075, until then the bears remain in control. On the support side of things, the first pocket comes in from 50.725-50.80, a break and close below takes us to new contract lows.
Resistance: 53.40-54.075***, 55.675-55.975****, 57.575-58.275***
Support: 50.725-50.80**, 47.50-47.825***, 45.00*
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