Recently in livestock Category

Hogs have seen a very steep decline in the past few weeks, but we are now approaching a strong support level and expect to see this market turn back up in the near term. Many indicators like stochastics and RSI are about to issue buy signals and our proprietary model is showing a high probability of a reversal in trend in the coming days. This trade offers a very attractive risk to reward ratio as well as a low absolute dollar figure to risk. Hogs can trade any where between 56 and 64 for us to profit so we have a huge 8.00 point range in which we can profit.

This past week we thought we would see upside follow through on the Dollar. The Dollar did start the week pushing higher but then turned and hit new lows. Our trailing stops took us out at breakeven so it was no harm no foul. This week we have a deluge of data. We have the all important FOMC meeting on Wednesday and then we end the week with the monthly NFP report, and we have many other smaller reports coming out every day this week. The markets have already priced in a cut of .25 by the FOMC so the direction hinges on the "guidance" they give in their statement about future cuts.

June live cattle futures on the Chicago Mercantile Exchange have seen prices back way off from the early-March contract high of $99.82. Prices late last week hit a fresh two-month low of 91.95 cents. A downtrend line has formed on the daily bar chart for June live cattle futures, drawn off the contract high scored in March and the April high. However, an uptrend line drawn off the October, November, December and January lows is also still in place on the daily bar chart for June live cattle.

June live cattle futures at the Chicago Mercantile Exchange have seen a steep sell off from the recent contract high of $99.82. Prices last Friday gapped lower on the daily bar chart, hit a fresh three-week low of $94.20, and closed at the weekly low close to produce some fresh near-term technical damage. Key for the cattle market bulls now is to defend solid chart support at the $94.00 area. A close below $94.00 would produce more significant chart damage to begin to suggest that a near-term market top is in place.

The Hog market has been steadily rallying for the last few months. We have recently tested and supported out above the rising trend line support line on the chart below. This rising trend is expected to continue and a move into the 70's is the target for the next leg up.

April live cattle futures at the Chicago Mercantile Exchange last week hit a fresh contract high of 96.20 cents a pound. Prices then backed off on some mild profit-taking pressure but have this week rebounded. This recent price action on the daily bar chart has produced a bullish flag formation. The measuring implications from this particular bull flag suggest that if prices do see an upside "breakout" from the pattern, then the upside objective would be just below the 100.00-cent level.

April lean hog futures at the Chicago Mercantile Exchange this week touched a fresh seven-week high of 68.50 cents a pound. Prices are in a three-week-old uptrend from the January low of 62.52 cents, and just recently did penetrate on the upside and negate a downtrend line drawn off the November 2006 highs.

Live cattle is a market I do not trade very often but after going over my weekly view of all the markets, I could not ignore the weekly chart pattern. Here, much like in the wheat trade, we have built a classic bull flag pattern while also doing a 50% fibonacci retracement, and small traders are also short this market as well. These types of pattern combinations have served us well in the past, and are not to be ignored.