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Futures trading involves substantial risk of loss and may not be suitable for all investors.

  • Oliver Sloup

Livestock Roundup

Outside Markets: Stock indices are higher this morning, at times trading to the limit up circuit breaker (5%). The oil market is firm as of writing this, but over $1 off the highs.


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Cattle

Cattle came out of the gates at limit up and stayed there all day for many of the contracts. For clients who wanted to get more exposure on, we worked orders at limit up and were able to get some fills, not nearly enough; which is always how it works: too much exposure when things go against you and not enough when it goes your way, part of the psychological aspect of trading. For those of you who aren’t aware, the market still trades when we are limit up, it’s just a long que of buyers with few sellers, so you’re not guaranteed a fill. The options market gave us a synthetic price yesterday of around 107.80, meaning if there were no limits, the April futures would have been trading near 107.80 yesterday. We have expanded limits. For Live cattle that is 4.50, for Feeder cattle that is 6.75, with MARCH feeders having an expanded limit of 10.00 today. In yesterday’s report we talked about the party getting started this week, we believe yesterday could have been just the beginning. Just as the market overshot to the downside, we wouldn’t be surprised t see it overshoot to the upside, especially with some funds trapped in a short position. If we do get a classic “rip your face off rally” over the next week or two, it should set up for another great opportunity for hedgers. Yesterday’s Cold Storage report showed beef stocks at 490.981 million pounds, more than the expectations but inline with historical average.

Lean Hogs

Lean hog futures will be trading with expanded limits today, 4.50. Potentially we see additional momentum through the week, but we are not huge fans of hogs and continue to believe there are better opportunities (cattle). Yesterday’s Cold Storage report showed pork stocks at 661.660 million pounds, less than the estimated 673, but more than the 5-year average of 622.


Sign up for your FREE two week trial of our daily commodity reports!

or Email Oliver with questions/comments: Oliver@BlueLineFutures.com


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.


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