Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LIVE CATTLE
Live Cattle futures made new high contract closes Thursday. All contracts except for August Live Cattle made new contract highs. Cattle aren’t overbought. The RSI on August is 62. With Live Cattle discount to cash, there is more room to the upside. However, Live Cattle/Lean Hog spreads with RSI near 80% could see some retracement. With concern about the US budget debit, ahead of a 3 day weekend, and Lean Hogs near oversold, a retracement on spreads could pull back Live Cattle futures.
LEAN HOGS
Thursday was another day of new contract lows. With Hogs now below the CME Lean Hog Index, the chance of a retracement is likely. The RSI on July Lean Hog futures is 22. With a 3 day weekend ahead it wouldn’t be unusual to see profit taking Friday. But spreads aren’t oversold. The July/August Lean Hog spread RSI is 65 percent. The August Live Cattle/August Lean spread is 80%.
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