CME Livestock Outlook:Live Cattle, Hogs Seen Mixed
Chicago Mercantile Exchange live cattle could open mixed Tuesday with an undertone of firmness on cash expectations, wholesale beef support and possible chart-oriented trading action.
Bullish cattle traders anticipate at least a steady fed cattle outcome this week given much-improved calculated packer profit margins, a broker said.
Another cash-plus for this week is the U.S. Department of Agriculture's boxed beef wire, the broker said. USDA's late-Monday data showed choice cuts up $1.06 per hundredweight and select items gained $0.79.
On the other hand, February gains may be limited by liquidation prior to the contract's Feb. 29 expiration and looming deliveries, said brokers and analysts. There were no deliveries posted by CME Monday evening.
Until something definitive develops on the cash-front, February and April might fluctuate between key moving average resistance and support levels, an analyst said.
February live cattle's 91.42-cent 10-day and 91.13-cent 20-day moving averages serve as areas of support. The contract's 93.08-cent 40-day moving average is a resistance target.
April's 94.69-cent 10-day and 94.42-cent 20-day moving averages are support levels. The contract's 95.93-cent 40-day moving average is a point of resistance.
Meanwhile, back-month cattle trader reactions may vary with respect to Chicago Board of Trade electronic-corn's mixed trade, a broker said. Uneven rather than lower corn prices might inspire a few longs, while others may wait for further direction following CBOT corn's outcry open, he said.
Brokers anticipate a mostly firm feeder cattle open on follow-through buying, higher feeder cattle cash values and underlying chart backing.
March feeder's 105.20-cent 10-day and 104.51-cent 40-day moving averages are support floors.
April's 110.23-cent 100-day moving average serves as a major area of support.
However, potential profit taking, board premiums' to CME's cattle index and uneasiness about directionless CBOT feedgrain's could limit potential gains or weigh on some month options, a broker said.
