RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Agricultural

Live Cattle Trending Up

Posted 11/06/2019 8:13AM CT | Peter McGinn

The cattle market has been in a strong upward trend since the beginning of September and we could continue to see some more buying action in the short-term. This is due to the strong increase in the open interest, suggesting that fund traders are still active buyers in the market. The back-month contracts could start seeing some pressure since there is a huge premium on futures to the cash market, making producers consider increasing weights and higher production. We will see what the next Cattle on Feed report holds for us, but some are expecting a large number of placements for the month of October and even into November, boosting 2nd quarter production.

Cash traded cattle in Nebraska traded at $113-$115 while Texas and Kansas had $112 traded. December cattle will try to make a push through the $120 price level, which is a level of resistance, in the short term and if it does breakthrough, I believe $124 is reachable by the end of the month. If there is a failure to trade through the current resistance level then a 38% retracement would cause the market to fall back to $112, I believe if there is a pull back then it falls back to the $115 support level and trades sideways from there. Technically, the market is significantly overbought with an RSI reading of 81. The USDA estimated cattle slaughter came in at 119,000 head yesterday. This brings the total for the week so far to 234,000 head, up from 231,000 last week, but down from 243,000 a year ago. USDA boxed beef cutout values were up $1.81 at mid-session yesterday and closed $1.24 higher at $236.05. This was up from $230.55 the prior week and is the highest since August 27th.

866-536-8601312-373-4998Series 3 Licensed

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.
Read More