DTN Before The Bell-Livestock
Early Commercial Selling Seen
Initial trade in live cattle and lean hogs saw commercial selling take chart, while feeders were quietly higher. Dec live cattle are down $0.70, Jan feeders are up $0.10, and Dec lean hogs are off $0.60.
LIVE CATTLE:
As discussed in this past Monday's Technically Speaking blog on DTN, the December live cattle contract finds itself in a precarious technical position early Friday. From a technical point of view, it would actually be better for the contract to close the price gap left the previous week between $121.625 and $122.325 to take the potential for an Island Top formation out of the picture. The early low is $121.775. Fundamentally the market has been hit by heavy commercial selling this week, with the December-to-February moving to a spread of nearly (-$6.00).
FEEDER CATTLE:
The market is showing early strength, likely supported by the continued sell-off in corn. Jan feeders have seen a wide range this week, and while in position to establish a secondary (intermediate-term) downtrend on weekly charts, at least closed a price gap similar to what was discussed in live cattle. Futures spreads are mixed early indicating most of the initial buying interest is coming from noncommercial traders.
LEAN HOGS:
December lean hogs are being hit with heavy commercial selling early Friday, losing about $0.50 in comparison to the Feb loss of $0.20. Technically Dec hogs are in free-fall mode, sitting near the week's low of $62.60 and building bearish momentum. As with live cattle, pressure in hog futures has come from commercial selling throughout the week with the December-to-February spread sitting at (-$7.30) Friday morning.
Darin Newsom can be reached at darin.newsom@dtn.com
(SK)
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