Live Cattle (August)
Live cattle took a tumble yesterday, giving us expanded limits today, erasing some optimism from late last week regarding cash and slaughter numbers. We have yet to hear the cash cattle chatter pick up this week but will keep you posted In our Weekend Ag Update we discussed thee significance of 99.85-100.975, noting: “This pocket is extremely significant and may prove to be a barrier on the first test. This pocket represents support from last August (Tyson plant fire), support in early March, the breakdown point at the end of March, resistance on March 25th, and the 50% retracement from the contract highs to contract lows. If we do stall out here, we could see Thursday’s gap filled, near 95.45.”. If we see follow through selling on the open we would strongly consider being buying with clients.
Resistance: 99.85-100.975****, 104.40-105.97***
Support: 95.10-95.45****, 92.525-93.675***, 89.05-90.025***
Feeder Cattle (August)
August feeder cattle tested but failed against our 4-star resistance pocket last Thursday, we have ha that defined as 137.70-139.125, this pocket represents support at the end of February, the breakdown point from early March, resistance at the end of March, a key retracement, and the 100 day moving average. Like resistance in live cattle, this is a highly congested technical pocket, making it significant (hence the 4-stars). On the support side of things, the market filled the gap from last week 132.75-133.725, this pocket also represents the 50% retracement from the contract highs to lows. This will become an important pivot pocket. If the bulls can defend this through the week, they are in control. Consecutive closes below, likely takes us to the low end of the recent range.
Resistance: 137.70-139.125****, 145-146***
Support: 127.25-128.45***, 123.475-124.30***, 121.00-121.65****
Lean Hogs (June)
June lean hogs have been pulling back for the last three sessions, but it has been in an orderly fashion which is more constructive. There is a gap from April 30th that comes in in between 59.25-59.95. If you want to be long hogs, this would not be a bad spot to consider buying. Ultimately, we are still looking for the market to settle into more of a range and would be waiting for a pullback closer to 55 to look at the buy side with more conviction.
Resistance: 66.025***, 68.75****
Support: 59.25-59.95***, 54.775-55.275**, 51.325-51.625***
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