This is a pattern entry from Kirk Donsbach’s publication, The Cattleman’s Advisory, revealed on April 24, 2017.
Weekly Cattle Commentary 04/21/2017
|Month||Actual||Average of Estimates||Range of Estimates|
|Cattle on Feed||April||100||99.7||98.7-100.6|
Cash gross sales for this final week have been principally 130 to 133$. Reported dressed gross sales occurred at 210 -212$. Basis is about even with April futures, relying on the world. Estimated weekly slaughter was 595Okay head. Box costs have regained extra of their losses, with selection down about 5$ from the March excessive and now again above the 5 yr common.
The week ending Apr eighth confirmed steer carcass weights falling 10# versus the prior week to 852#. 28 kilos underneath final yr. Marginally under the 5 yr common.
June Live closed Friday with a brand new yearly excessive commerce and weakly excessive shut, with all technical indications pointing larger. Funds proceed so as to add contracts. The market will react violently IF one thing spooks the longs. Until then managed cash and development might be supportive. Seasonals at the moment are additionally including help. As of Monday morning, the COF shock has June posting a strong development line break and confirming Fridays reversal. Keep in thoughts the market additionally posted a reversal Tuesday, that was canceled by Thursday. I don’t know if that is the highest, however that is what a prime will seem like when it comes.
Feeder Cattle Green grass and constructive feeder margins are supportive to the feeder market, particularly mild cattle. The CME feeder cattle index is at 138.05. The index is now about 1$ underneath April Feeders. Break evens are getting robust to work if the market power doesn’t proceed.
May Feeders reached 143 on Thursday earlier than closing decrease with a strong wanting reversal. The shock within the COF has the market confirming Thursdays reversal and breaking the brief time period up development line Monday mornig. You could be pretty assured that this minor “wave” or transfer greater is full. We have no idea if this can be a correction, on the lookout for a lower cost to provoke the subsequent wave to new highs, or a serious prime. I might not need to see weak spot prolong under 134 to 136$.
Seasonals have turned larger. May feeder futures topped in March or April 5 of the final 7 years. 2014 May feeders rallied by means of expiration. 2013 May feeders posted a excessive in January.
Short time period development for May feeders is impartial with the minor development line break decrease.
Moving averages are bullish.
Stochastics gave a recent promote final week.
Down Side Targets (May feeders)
Support at 129
Major development line at 124
Major help round 121
Gap on the continuation chart round 143 (glad Thursday)
Bull flag projections to 146.
Major resistance at 150
Most shoppers moved to May places on three/23 or three/24. With May futures above 135, I personally spent three$ on 132 May places. Some shoppers selected to be much less aggressive and went with the inexpensive 130 places. We rolled to 138 might places by hook or by crook on Thursday (four/20). I spent 1.25$ and elevated my safety degree 6$ for a ratio of 1:four.eight.
We salvaged slightly over a greenback of worth out of the Feb Live places and moved to June 104 places some time again. On three/23 we rolled June 104s as much as June 108s, and June 106s as much as June 110s. We added 1$ of hedge expense in each situations. The 108s have been rolled to 112 for 1$ 2 weeks in the past, and the 110 to 114s have been crammed at a 1$ value late final week. All shoppers sit with 112 or 114 June Live places.
May Feeder chart sourced from RJO Vantage four/24/2017
July Corn chart sourced from RJO Vantage four/24/2017
June Live chart sourced from RJO Vantage four/24/2017
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