Live Cattle Futures—Live cattle in the June contract finished lower for the 4th consecutive session down 297 points at 115.37 as this market has absolutely collapsed over the last several days hitting a 4 month low. I have been talking about cattle for quite some time as I had a bullish bias and if you were long a futures contract I was recommending that you place the stop loss at 119 .60 on a closing basis as you should have exited in yesterday’s session as there is no reason to be bullish at this time.
The chart structure is terrible as there is no reason to take a bullish or bearish position in my opinion as it’s time to sit on the sidelines as prices are now trading under their 20 & 100 day moving average as the trend has changed. Damage from the floods in Nebraska looks to not have been as bad as 1st reported as that is why you are seeing lower prices coupled with the fact that hogs have turned quickly finishing limit down in today’s trading session which is also putting pressure on cattle as the agricultural markets continue to remain weak.
The volatility is exceptionally high as that situation won’t change as we enter the strong demand summer season as beef and pork are favorites for Americans during this time frame as I think the downside is limited, however, wait for a better risk / reward situation to develop.
CHART STRUCTURE: POOR
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