Live Cattle (April)
April live cattle futures continued to drift lower yesterday, breaking and narrowly closing below our 4-star support pocket, 119.40-119.90. We have been talking about being buyers in that pocket after suggesting reducing against technical resistance, 124.50. We did not get the springboard off support like we wanted and if we cannot get that today it will neutralize our near-term bias. The next meaningful support pocket does not come in until closer to 117. We were hoping to see cash and the board work together to narrow the gap. Now that April is the front month and cash has not budged, it has put the pressure on the board to narrow the basis.
Resistance: 121.25-122.00**, 124.25-124.55***, 126.00-126.70** Pivot: 119.40-119.90 Support: 118.55**, 117.025-117.65*** Feeder Cattle (April)
April feeder cattle traded into our 4-star support pocket, 140.05-141.10 and managed to hold. This is the low end of the recent range and as mentioned in yesterday’s report, this is “a buying opportunity on the first test”, whether you are buying to cover shorts or buying to be long, it depends on your personal bias. If you are Bullish, you want to see that pocket defended through today’s session, a break and close below could trigger additional technical selling. So, be sure to manage your risk.
Resistance: 145.175-145.80***, 147.00* Pivot: 143.15 Support: 140.05-141.10****, 135.025-135.975*** Lean Hogs (April)
April lean hogs had an inside day, trading within the previous day’s range, which isn’t saying much because Friday’s session was a 3.475. A break and close below Friday’s low, 86.80, could spark some additional profit taking down towards 83.55-84.325. This pocket represents previously important price points and the 50-day moving average.
Resistance: 90.275-90.675** Support: 83.55-84.325***, 79.725-80.875****
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