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Live Cattle (December)
Friday’s Cattle on Feed report showed the following: Cattle on Feed 98.6%, the average estimate was 99.3%. Placements came in at 97.1%, the average estimate was 101.4%. Marketings came in at 96.9%, the average estimate was 97.2%. Friday’s Commitments of Traders report showed Managed Money were net buyers of 9,257 futures/options, expanding their net long position to 44,727 futures/options (74,749 longs and 30,012 shorts), still a modest position. Friday’s price action took the market into technical support, a pocket that we have defined as 127.825-128.30. We’ve viewed this pocket as a buying opportunity, but the Bulls MUST defend it on a closing basis. A failure to do so would neutralize our bias.
Resistance: 130.75-131.575***, 132.00-132.50***, 134.575-134.85***
Support: 127.825-128.30***, 124.35****
Feeder Cattle (November)
November feeder cattle got hit hard on Friday, extending losses for the week to 4.525. Looking at the premarket bids/offers, it looks like we may recoup some of those losses out of the gate. The Bulls need to achieve a conviction close back above previous support, 158.10-158.45, to feel comfortable holding positions.
Resistance: 161.40-162.125****, 163.975-164.65**
Lean Hogs (December)
December lean hogs filled “the gap” last week, but failed to find support at that level, which led to extensive pressure during the Thursday session. There are now gaps above the market, but Bulls need to worry more about defending the September lows, which come in near 71.275-72.50.
Resistance: 81.15-81.425**, 83.52-84.00**, 86.05-86.25****
Milk prices continued to move higher on the strength mostly of the dry products. Dry whey and non-fat milk continue to outpace both cheese and butter. With supply chain issues demanding seemingly a buy at any price mentality it will be interesting to see if either cheese and butter break the sideways pattern of late and participate in the rally or maybe they will drag down milk prices when bids slow down. An interesting number in the milk production report last week was a reduction in per cow production. That has not been seen in a long time and will be worth noting in next months report.
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Blue Line Futures
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.