Cattle struggled this past week with both contracts posting losses for the first three sessions of the week but then cattle managed to reverse direction and post gains to close out the week. Fundamentals remain friendly (tight supplies, strong demand), but the technicals have turned bearish as cattle have broken through support.
Live cattle started the week posting small losses while feeder cattle got hit hard. After opening steady to higher due to support from Friday’s neutral to friendly COF report, cattle experienced selling tied to pressure from a sharply higher crude oil market and lower stock market. The cattle market continues to be sensitive to items that influence consumer spending and with higher energy cost and lower investments, traders get nervous about domestic demand decreasing.
Tuesday’s session saw cattle opening steady to lower, recover, but then fade to post large triple digit losses at one point during the session. Cattle were able to bounce off session lows due to continued friendly fundamental news, as supplies remain tight while demand remains strong.
Technically cattle are facing a different story. After trading to new all-time contract highs last Wednesday, cattle have reversed and trading on the defense. Looking at the charts, it appears that after closing the gap left in Oct, cattle managed to trade to new highs, but are now in a position to test the top of the gap left in Oct. If cattle fill that gap on the downside (which is another $3 to $4 lower) then cattle could see a major sell-off before finding support. In other words, cattle need to hold where they are or we could be another major retracement.
Selling continued to dive cattle midweek. The front month April contracts are not seeing much in the way of movement as they are tied to cash. But the deferred months continue to move with the headlines. On Wednesday, cattle opened mixed with live cattle steady to lower while feeder cattle opened with gains. Cattle continued to chop around seeing both sides of the ledger as traders try to pick a direction. Fundamentals remain strong but the technicals are facing a different story. After trading to new all-time contract highs last Wednesday, cattle have reversed and trading on the defense.
To close out the week, live cattle bounced higher to close with small gains after closing lower in the 6 previous sessions. Feeder cattle closed lower in the front month soon to expire April but with gains on all deferred months. Cattle started the session lower but managed to break out of the pressure and push higher around midsession. Technical buying was the main reason for the push as most of the cattle contracts are oversold and in need of a correction. This week’s cash activity has been reported taking place at $246. Last week’s beef export sales pace was estimated at 15,131 MT.
For the week, April live cattle closed at $248.30 down $1.65. April feeder cattle closed at $367.625 down $3.70.
Cattle Weekly Comments April 24
Cattle Weekly Comments April 24
Cattle struggled this past week with both contracts posting losses for the first three sessions of the week but then cattle managed to reverse direction and post gains to close out the week. Fundamentals remain friendly (tight supplies, strong demand), but the technicals have turned bearish as cattle have broken through support.
Live cattle started the week posting small losses while feeder cattle got hit hard. After opening steady to higher due to support from Friday’s neutral to friendly COF report, cattle experienced selling tied to pressure from a sharply higher crude oil market and lower stock market. The cattle market continues to be sensitive to items that influence consumer spending and with higher energy cost and lower investments, traders get nervous about domestic demand decreasing.
Tuesday’s session saw cattle opening steady to lower, recover, but then fade to post large triple digit losses at one point during the session. Cattle were able to bounce off session lows due to continued friendly fundamental news, as supplies remain tight while demand remains strong.
Technically cattle are facing a different story. After trading to new all-time contract highs last Wednesday, cattle have reversed and trading on the defense. Looking at the charts, it appears that after closing the gap left in Oct, cattle managed to trade to new highs, but are now in a position to test the top of the gap left in Oct. If cattle fill that gap on the downside (which is another $3 to $4 lower) then cattle could see a major sell-off before finding support. In other words, cattle need to hold where they are or we could be another major retracement.
Selling continued to dive cattle midweek. The front month April contracts are not seeing much in the way of movement as they are tied to cash. But the deferred months continue to move with the headlines. On Wednesday, cattle opened mixed with live cattle steady to lower while feeder cattle opened with gains. Cattle continued to chop around seeing both sides of the ledger as traders try to pick a direction. Fundamentals remain strong but the technicals are facing a different story. After trading to new all-time contract highs last Wednesday, cattle have reversed and trading on the defense.
To close out the week, live cattle bounced higher to close with small gains after closing lower in the 6 previous sessions. Feeder cattle closed lower in the front month soon to expire April but with gains on all deferred months. Cattle started the session lower but managed to break out of the pressure and push higher around midsession. Technical buying was the main reason for the push as most of the cattle contracts are oversold and in need of a correction. This week’s cash activity has been reported taking place at $246. Last week’s beef export sales pace was estimated at 15,131 MT.
For the week, April live cattle closed at $248.30 down $1.65. April feeder cattle closed at $367.625 down $3.70.