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Live cattle finished yesterday’s session little changed after trading in an extraordinarily tight range, relatively speaking. Yesterday’s Fed Cattle Exchange sold 818/4484 head, coming in from 94.50-100.00. Net sales came in at 9,,400 metric tons, down 16% from last week and 43% below the 4-week average.
With the market little changed yesterday, our technical support and resistance pockets remain unchanged. Significant support for the August contract comes in from 86.375-87.00, the Bulls MUST defend this pocket. A close below could lead to a retest of the contract lows. If the Bulls can defend this pocket, we could continue to see the bottoming process take place, forming an inverse head and shoulders on the daily chart. Significant resistance comes in from 92.525-93.675. Consecutive closes above here likely sparks short covering and takes us back above the psychologically significant 100 level.
Resistance: 85.35-85.95***, 88.125-89.25****
Support: 79.85-80.70****, 76.60***
Resistance: 92.525-93.675****, 100.975-104.475***
Support: 86.375-87.00****, 84.575-85.175**, 80.50****
Feeder Cattle (August)
August feeders continue to press towards the top end of the recent range, threatening a breakout. Resistance comes in from 130.30-131.225. These are wider ranges than we typically like to rely on, but that’s the environment we are in. If the bulls can achieve consecutive closes above this pocket, we believe that would open the door for a retest of the March 25th highs, 139.00. On the support side of things, 123.475-124.30 is the first pocket the Bulls need to defend. A close below here could lead to a bigger pullback. We believe the bull camp has a slight advantage on the chart, but they need to see a move above resistance soon. A failure will show a lack of conviction and the bears could pounce.
Resistance: 130.30-131.225***, 134.10-135.10**, 137.70-139.125****
Support: 123.475-124.30***, 121.00-121.65****, 118.825**
Lean Hogs (June)
June hogs had a headline driven reversal on Tuesday which led to moderate pressure in yesterday’s trade. First support remains intact from 54.775-55.275, a break and close below here and we likely see a run back down to 51.325-51.625. Ultimately, we would not be surprised to see the market settle into a range in the coming weeks, between 45 and 55. Net pork sales came in at 50,300 metric tons, 27% higher than last week and 12% above the 4-week average. Increases were primarily from China, 35,100 metric tons.
Resistance: 57.175-57.825***, 60.775**
Support: 54.775-55.275**, 51.325-51.625***
Feel free to call/text/email, Oliver with any questions. Oliver@BlueLineFutures.com and 312-837-3938
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.