RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Agricultural

December Live Cattle Challenging 100-Day Moving Average

Posted 11/14/2018 8:58AM CT | Peter McGinn

The cattle market has been trading higher lately, closing at 115.275 yesterday. This close came above the 100 day moving average. If we see a close above the 115.825 level today, that should signal a short-term turn around. The market looks to be entering oversold territory, and yesterday’s closing price reversal gives this market a bullish tilt for the near-term. The slaughter number that came in yesterday was 119,000 which brings the weekly total up to 230,000, which is down 8,000 from last week, and down 7,000 from last year. The expectation is that cattle has found short term support in the market and we could see a rally up to 116.000 and possibly up to the 117.000 price level. Yesterday’s lower move early then higher close was in part due to the aggressive and unchecked buyer support that flooded the feeder cattle market during the last hour of trading. The move higher in the feeder cattle market had brought increased and more consistent buying activity which posted gains of .40-.70 cents higher in most contract months. Beef cutouts were lower, $1.41 lower (select, $198.98) and down $1.47 (choice, $214.08) with light demand and offerings.

December Lean Hogs continued its 5-day winning streak with a close over the 50 day moving average (MA) and is starting to test the 200-day MA. A break through and close of the 200 Day MA could signal a rally up to the $60 price level. Short-term supply is bearish, but with the continued outbreaks of African Swine Flu in China and continued trade talks fighting the near-term supply, I expect Hog Futures to continue to move higher.

Live Cattle Dec ’18 Daily Chart

Live Cattle Dec '18 Daily Chart

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Peter McGinn

Market Strategist
Peter graduated from DePaul University with a degree in Economics. Peter started his career with an IB at the Chicago Board of Trade. He then moved on to TradeStation Securities for a time before starting as a Market Strategist at RJO Futures in 2018.
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