By Cassie Fish, http://cassandrafish.com
After flirting with a tiny early rally, CME cattle futures have sold off hard, taking out the last two week’s lows and the 40-day moving average in Apr LC. The last time Apr closed below the 40-day was in early December. Technically, the action is bearish, the indicators pointing toward more downside. Although Apr LC did make a new spot high on March 1, it was unable to close above the Feb LC expiration of $129.95.
If Apr LC did top on March 1 at $130.45, it failed to take out last year’s spot high of $130.52. Cash thus far has been able to test last year’s cash top of $130, stopping at just above $128.
Indeed the 2019 spring rally has been quiet and contained even though the rally has seen a record open interest build. Blow off tops seem to be a thing of the past as short hedgers maintain their positions.
Expectations for this week’s cash trade is steady to lower. Boxes are reaching a top this week of their March rally. This week’s slaughter is estimated at 608k to 610k head, up from last week’s 603k. Kills will start to ramp up sharply in the second half of April and boxed beef prices will advance to their seasonal top in May or June.
In the meantime, CME cattle futures may well have topped this month, while cash finds if it has any upside momentum left- or not.
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