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Live Cattle (August)
August live cattle made closed at the highest level in nearly a month as we continue to move past the “peak panic” stage of COVID-19. Friday’s Commitment of Traders report showed funds bought net 2,658 contracts, expanding their net long position to 4,464. This is a very small position for them, so if things look like they are turning for the better, they have the powder to add aggressively. We do not foresee them to retest the low end of their most recent net short position.
The market tripped stops above the top end of the range and finished Friday’s session near our 4-star resistance pocket, 92.525-93.675. Though we remain optimistic on futures prices, the top end of the range should be a spot to consider reducing, not adding aggressively. First support today comes in from 89.05-90.025. We pullbacks will be buying opportunities and would consider buying a pullback to this level, on the first test.
Resistance: 88.125-89.25****, 91.55**, 92.075-93.325****
Support: 79.85-80.70****, 76.60***
Resistance: 92.525-93.675****, 95.10-95.30***, 99.85-100.975****
Support: 89.05-90.025***, 86.375-87.00****, 84.575-85.175**, 80.50****
Feeder Cattle (August)
August feeder cattle ripped higher at the end of last week but finished the session near unchanged after failing against our 3-star resistance pocket, 130.30-131.225. 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, so we would be looking to buy a pullback to first support.
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 lean hogs have been on fire since bottoming out in the middle of April, rallying over $20! Our significant resistance pocket comes in from 63.25-64.25. This pocket represents the gap from March 27th and the 50-day moving average. We continue to believe we will see the market start to develop a range in the coming week or two. We would be waiting for that to happen before getting aggressive in trading this mustang.
Resistance: 60.775**, 63.25-64.25****
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.