Live Cattle

Technicals (June-M)

Today’s trade was a snowball like event with bearish headlines feeding on themselves which led to somewhat of a capitulation. I think you still saw some follow-through selling from Friday’s Cattle on Feed report, you had concerns of avian flu spreading, we are entering a time of year that is historically bearish, you had a technical breakdown, and we have the end of month and end of the quarter this weeks with funds not wanting to give back everything they worked so hard for since the start of the year. Is the bottom in? That is still TBD, seasonals would suggest no, but even if it isn’t, I wouldn’t be expecting to see a similar fall out to what we saw at the end of the last year. The main reasons being that we are starting from lower price points with a similar fundamental backdrop, and the second being the fact that Funds are only 60k contracts long, nearly half of what they were last Fall. We’ve had a bearish tilt to our bias for the last several weeks, but the recent pullback is starting to shift the near-term risk back to the upside in our opinion.

Resistance: 181.95, 185.85-186.625**

Pivot: 179.825-180.625

Support: 175.70-176.40****

Seasonal Tendencies (June Live Cattle)

Below is a look at historical seasonality’s (updated each Monday) VS today’s prices (black line). Seasonally we start to see June futures soften up, but if you’ve been watching cattle at all over the last year you know that seasonals tendencies tend to have had a lower correlation this year.

*Past performance is not necessarily indicative of futures results.

Commitment of Traders Snapshot

(updated on Mondays)
Friday’s Commitment of Traders report showed Fund positioning was little changed, holding a net long position of 62,391 futures/options contracts. Broken down that is 84,973 longs VS 22,582 shorts.

Feeder Cattle

Technicals (April- J)
In yesterday’s report along with other recent reports we noted that: “247.15.248.00 is going to be a big pocket to keep an eye on, a break and close below that could accelerate the selling pressure.”. Accelerate is exactly what we got and may be even an understatement as prices dropped as low as 243.80 in today’s trade. As mentioned with live cattle, our bearish bias in feeder cattle is starting to shift as prices become more attractive. With that said, the technical landscape and the thinner volume trade has us a little hesitant to flip the script just yet. Previous support will now be resistance, that comes in from 247.15-248.00. If the Bulls can crawl back above this level, we could see additional relief take prices back above 250.00.

Resistance: 252.60 253.85, 256.90** 260.65-260.80

Pivot: 247.15-248.00

Support: 243.80**, 240.50, 238.50

Seasonal Tendencies

Below is a look at historical seasonality’s for May Feeder Cattle (updated each Monday) VS today’s prices (black line). Historically, this isn’t the best time to get supper bulled up on Feeder Cattle, but time will tell.

*Past performance is not necessarily indicative of futures results.

Commitment of Traders Snapshot

(updated on Mondays)
Funds hold a net long position of 11,453 futures/options contracts.

Continue reading the full report at: Cattle Futures Under Heavy Pressure on Tuesday - Blue Line Futures

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.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Performance Disclaimer

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.