Are Cattle Futures Prices on the Verge of a Breakout?
Live Cattle
Technicals (June-M)
June live cattle futures staged a breakout in Friday’s trade, closing out our 3-star resistance pocket from 179.65-180.75. The market was also able to clear the 200-day moving average, closing above it for the first time since March 25th. Looking at seasonal tendencies, we see the August contract showing signs of strength from the end of May to expiration. There are a lot of moving parts this year (as with any year) so don’t take that seasonal to the bank but be aware it could be a factor that influences positioning from some traders.
Friday’s Commitment of Traders report showed funds holding a net long position of about 42k futures and options contracts, basically unchanged for the last 6 weeks which has fit to our narrative that Funds could be on the sidelines with looming headline risk. With seasonal strength ahead of us, we could see them dip the toes back in.
Resistance: 182.525, 184.65
Pivot: 179.65-180.75
Support: 178.45-178.80, 175.80-176.20
Feeder Cattle
Technicals (August – Q)
August feeder cattle broke out above trendline resistance and the 50-day moving average on Friday which could open the door for an extension towards 263.325-264.875 which represents multiple previously important price points, including the breakdown point from March 26th. Seasonally we are approaching a time of year where we start to see prices firm, which has historically gone through the first week of July. Whether or not that plays out this year is still in the air.
Resistance: 263.325-264.875****
Pivot: 258.00-258.50
Support: 254.025-255.00, 248.30-250.075, 243.27
Lean Hogs
Want to keep reading?
Subscribe to our daily Livestock Roundup for daily insights into Feeder Cattle, Live Cattle, and Lean Hogs technical, including our proprietary trading levels, and actionable market bias.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. 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.
Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
On the date of publication, Oliver Sloup did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
