Live Cattle Futures—Live cattle futures in the June contract settled last Friday at 115.05 while currently trading at 113.65 down about 240 points for the trading week hitting a 5 month low and now has traded lower for 10 consecutive sessions as this market has turned on a dime.
Large money managed funds had record long positions as they have been liquidating as that is part of the reason why you have seen this collapse as I was bullish cattle about a month ago, but when prices hit the 2 week low as it was time to move on that’s why you must have an exit strategy.
The next major level of support is around the 110 / 112 level and if that is broken there could be problems ahead as the damage from the floods in the midwestern part of the United States did not seem to have as big of an impact as once thought. Cattle prices are now trading below their 20 and 100 day moving average as the trend clearly is to the downside, however the chart structure is poor as I’m advising clients to sit on the sidelines and wait for a better risk/reward situation to develop.
The agricultural markets still remain weak as I have several short recommendations at the present time as it looks to me that prices will try to test the contract low which was hit on November 13th around the 111.62 level.
CHART STRUCTURE: POOR
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