Livestock Roundup (3.13.18)
Oliver Sloup of Blue Line Futures - - Tue Mar 13, 6:05PM CDT

Cattle Commentary: Cattle futures started the day off on the softer side but managed to reverse and recover into the close. April fat cattle finished the session up .65 at 122.20, trading in a range of 1.825. April feeders finished the session down .20 at 142.375, trading in a range of 2.175 for the day. In yesterdays report we mentioned looking for cash to trade steady to 1 higher, that was where the bulk came in today. We saw a lot of 126 and 127 with 128 making an appearance in NE, we were calling/texting/emailing clients as these whispers started in the early afternoon. The bulls need to see a firm cash trade develop into a rally on the board, a failure to sustain anything will encourage longs to throw in the towel. Tomorrows Fed Cattle Exchange has a whopping 113 head listed. Outside markets got hit after the cattle close, if this continues into tomorrow it could be a headwind for the board. Boxed beef was lower on the day.

PM Boxed Beef / Choice / Select

Current Cutout Values: / 223.73/ 216.75

Change from prior day: / (.17)/ (.74)

Choice/Select spread: / 6.98

Cattle Technicals

Live Cattle (April)

Cattle spent majority of the day under pressure as they slow bleed brought prices down to their lowest levels in two months. We have been talking about 120.15-120.25 being very significant for a while now, we echoed that again on RFD-TV today as this is the last line of defense. A break and close below would encourage additional fund selling and potentially press prices back towards 117.90-118.05. Fortunately, the bulls found buyers just above that pocket and closed towards the higher end of the days range. First resistance we mentioned in yesterdays report was tested held, that came in and continues to be at 122.55, this represents a key Fibonacci retracement from the August lows to the November highs. If bulls can chew through this we would expect to see the market run towards the top end of the recent range which is also technical resistance defined by the 50 and 100 day

moving average, that comes in from 123.55-123.80.

Resistance: 122.55**, 123.55-123.80****, 125.45-125.675***

Support: 120.15-120.25**, 117.90-118.05****

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Feeder Cattle (April)

April feeder cattle posted lower lows yet again today before rebounding towards the close to finish only slightly lower. Technical support for the May contract comes in from 141.025-141.75, this pocket represents previously important price points along with a key Fibonacci retracement from the June lows to the November highs. If this pocket gives way, we could see momentum selling pressure press prices down towards 137.70. On the resistance side of things, the bulls have some work to do and need to reclaim 144.75-145.00 to start shifting the tide back in their favor.

Resistance: 143.85-143.95**, 144.75-145.00**, 146.45-146.85***

Support: 141.025-141.75***, 137.70****, 131.25****

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Lean Hog Commentary and Technicals (April)

Lean hog futures put the squeeze on weak shorts as they made a run towards 69, that was shortly lived as buying dried up and pressed prices back towards the unchanged level. April futures finished the day up .10 at 67.775, trading in a range of 1.425. We have been pretty clear in our bearish bias over the past two months but that is starting to shift. The juice left in the short side grape is likely limited at this point. We would not be surprised to see the market fish for the August lows near 65, this would be the point where we would see value to the buy side on the first test.

Resistance: 69.50-69.80***, 71.15-71.35**, 72.60-73.15****

Support: 66.425-66.875**, 64.85-65.05***, 63.50-63.75**

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