Livestock Roundup

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Friday’s Cattle on Feed report:

On Feed: 94.5% VS estimated 94.8%

Placed: 77.9% VS estimated 77.3%

Marketed: 113.1% VS estimated 112.1%

In a normal market environment this would be a very bullish Cattle on Feed report, unfortunately we are in anything but a normal environment, so it is taken with a grain of salt. March placements totaled 1.56 million head, a record low for March (data collecting started 1996). Very early indications call for a higher open today, with front months showing limit up, at the time of writing this. We are optimistic on cattle, leaning on that August contract as the foundation of a core long position. Friday’s Commitment of Traders report showed funds holding a net long position of 4,382 contracts, up 2,018 from the previous week.

Technical Outlook

Live cattle spent most of last week consolidating ahead of Friday’s report, creating several opportunities for shorter term traders on both sides (buyers & sellers) to take some meat off the bone. 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**, 88.125-89.25****

Support: 79.85-80.70****, 76.60***


Resistance: 90.00-90.70**, 92.525-93.675****, 100.975-104.475***

Support: 86.375-87.00****, 84.575-85.175**, 80.50****

Feel free to call/text/email, Oliver with any questions. and 312-837-3938

Feeder Cattle (August)

August feeder cattle continue to loiter in the middle of a range, creating a wedge with higher lows and lower highs. This can often lead to a bigger directional move, a breakout or a breakdown. We are leaning on the optimistic side but are not getting married to it until we see technical confirmation. Resistance today 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, 121.00-121.65 is a significant pocket. A close below here could take us to the gap from April 6th, 118.825. 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 lean hogs managed to grind higher last week in what was its most successful week in what seems like a lifetime. We could see an extension towards the April 8th highs, 57.15, but we wouldn’t be looking for that to be a straight line and the Bull camp should still tread lightly. Previous resistance now becomes support, we see that at 49.175.

Feel free to call/text/email, Oliver with any questions. and 312-837-3938

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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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