Livestock Roundup and Closing Grain Commentary (Video)

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Cattle Commentary

The cattle market was a bit more fidgety today than it has been through the first two days of the week. Fridays Cattle on Feed report could have some market participants tightening their book as private estimates continue to roll out. Early estimates are as follows: On Feed 106.2%, Placed 116%, Marketed 102.1%. Beef stocks are estimated to be at 502 million pounds, this compares to the five year average of 453 million pounds. December live cattle opened up softer but managed to close on stronger footing, todays range was 2.55. Feeder cattle were a little tamer, trading in a 1.90 range and finishing the session right where they opened.

Cutout Values Choice Select
Current Cutout Values: 197.26 189.09
Change from prior day: -0.40 -0.76
Choice/Select spread: 8.17

Cattle Technicals (if you want to see the charts we are looking at please contact me)

Live Cattle (December)

December live cattle gapped lower on the open on the back of a technically weak close in the previous session. With the Cattle on Feed report approaching fast, it was likely a run for the exits as some wanted to lock in gains. The weaker open accelerated through the first hour of trade, posting a low of 114.525 on the session, just a hair below the *** (Three Start) support level we have had in our daily updates this week. This support level represents the 100-day moving average as well as trendline support from the August lows. First technical resistance for Thursdays session comes from 117.475-117.575. The reversal is technically bullish for the near term but near-term fundamentals could lead to a choppy consolidation into Fridays report.

Resistance: 117.575**, 119.175-119.85***, 122.85****

Support: 116.30-116.50**, 114.60***, 112.65-112.90***

Feeder Cattle (November)

Like the live cattle, feeders closed lower yesterday which had longs nervous on todays open and long liquidation ensued. The market made a low of 150.825 within the first hour, rebounded slightly and then retested the lows; the inability for the market to follow through to the sell side invited buyers back into the market which led November feeders to close right where they had opened. 151 has been an important level on a closing basis, this was the original breakout point last month and acted as support at the end of September and very beginning of October. If the bears manage to achieve a close below this level it is likely we could see a run towards 147.82-148.95; although it is a relatively wide support pocket, it is very significant in our minds.

Resistance:156.975-157.15***, 158.025***, 160.90**

Support: 151.375-151.475***, 147.70-148.65****

Lean Hog Commentary & Technicals (December)

Lean hog futures have been volatile this week, trading in a consistently wider range than what we saw last week. Weak longs and weak shorts are likely getting shaken out as the market tries to find a catalyst for its next directional move. The cold storage report will be released later in the week, estimates are for 593 million pounds of pork, this compares with the five-year average of 609 million pounds. On the technical side of things, the market found some buyers just above the 200-day moving average which we mentioned yesterday, that will continue to be first support at 61.83. On the resistance side 64.50 is the first line in the sand with the market poised for new contract highs on a close above that.

Resistance: 63-63.125**, 65.35-65.675***, 67.825**, 71.325**

Support: 61.35-61.80***, 60.10**, 55.775-56.20****

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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.