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Feeder Cattle Futures Analysis

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Feeder Cattle Futures

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.   

Free in-depth analysis of the Feeder Cattle futures market written by a professional Feeder Cattle trader.

May 19, 2013

Feeder Cattle Futures Trader, Van Commodities, Inc.

The Cattle on Feed report (COF) released after the close of the futures markets Friday was more bearish than expected. Placements of one hundred fifteen percent for April 2013 were three percent above the average estimate; On-feed came in seventeenths higher than expected, at ninety-seven percent and marketing’s were nine tenths below at one hundred and two percent. Although placements were high relative to last year, 2012 placements were small and the reported placements for April 2013 came in lower than placements in 2011.

 

The Feeder Cattle future for August (GFQ13) has traded down six percent from its intraday high on April 26. The question for traders is whether the market already priced in the bearish COF numbers reported Friday. From a chart perspective, GFQ13 needs to rotate back up and close above 144.00 quickly to give bullish traders some hope.

 

GFQ13 is oversold based on several short and intermediate term momentum studies. Trade on Monday may give market participants a clue as to how feeders will trade over the next few weeks. If GFQ13 can disregard the negative COF data and reverse the downtrend that has been in place over the past several weeks, feeders may catch a tradable bounce. GFQ13 may find initial support at 141.00-143.00, with longer term support at 135.50.  If the contract catches a bounce initial resistance may come in at 147.50-148.50 and longer term resistance at 151.00-153.50.

 

May 5, 2013

Feeder Cattle Futures Broker, Van Commodities, Inc.

The Feeder Cattle future (GFK13) scored a reversal day to the downside on Friday. The question for traders next week will be whether the prior weekly chart reversal has been negated or whether the pullback over the past week is just a retest of the April 22 low of 137.65.

 

If the weekly reversal in the week of April 22 is to hold GFK13 needs to find support not far below Friday’s close. The contract needs to get back above the 138.85-129.25 to make this participant more positive about the near term for GFK13. Initial support for GFK13 may come in at 138.40. If buyers are not found at that level, GFK13 may find better support at 137.00-137.65. If this level does not hold the contract may need to trade down to 134.10-135.00 before support comes in.

March 13, 2013

Feeder Cattle Trader, Van Commodities, Inc.

The Feeder Cattle future (FCJ13) appears to be putting in a tradable bottom. Several intermediate term momentum indicators are oversold and several short term indicators appear to be flashing a momentum divergence with price action.

 

A move to the upside on profit taking, from the roughly eleven percent sell off since the January 4 intraday high at 158.25, appears to be a reasonable possibility. Along with the market being in an oversold condition; the next Cattle on Feed report is just around the corner on March 22. Initial support may come in at 141.00-141.90 with strong support at 139.50-140.70. If the levels previously discussed hold, a move back up towards 146.10-147.50 may be achievable.

February 9, 2013 

Feeder Cattle Broker, Van Commodities, Inc.

The March Feeder Cattle future ((GFH13) closed Friday at the bottom of both its weekly and daily range. Although the longer term supply numbers appear to be constructive and expectations of improved beef exports to Japan appear to be supportive of the cattle complex as a whole, concerns over near term demand, heavy weights, and poor packer margins, continue to undermine price.

 

GFH13 may be close to a tradable bounce as several intermediate term momentum indicators are oversold and short term indicators are moving towards a similar condition. Initial support may come in at 143.00-144.00 with strong long term support at 138.00-139. 00, if initial support gives way. Over the near term initial resistance may appear at 147.50-148.50 and stronger resistance at 149.50-150.50.

 

Feeder Cattle Futures Broker, November 29, 2012

The Feeder Cattle contract for January (GFF13) has been trading in a $.09 range since hitting a low of 142.37 July 17, 2012. Although the longer term fundamentals appear to be positive for the Cattle complex, there are several short and intermediate term factors holding the complex back. Some of the near term concerns include; the political negotiations over the fiscal cliff and its implications for the economic environment, questionable demand on both the domestic and export fronts and weak packer margins.

 

The price action for GFF13 since July 17, 2012 appears to be a consolidation pattern after the sell off from May 21, 2012 to July 17, 2012. The price action over the past four and a half months, starting in the middle of July, has worked of the oversold condition on an intermediate term basis and has become marginally overbought on both an intermediate and short term basis. The trading range between 142.37 and 151.55 is still evolving, but it appears there is a good probability that when the market breaks out it will be to the downside. Initial resistance for GFF13 comes in at 147.90-148.50 and further selling pressure at 150.50- 151.80. Initial support in the near term comes in around 143.20-144.50 and then 141.25-142.35.

March 5, 2012

Commodity Trader, Van Commodities, Inc.

Feeder Cattle futures pulled back across the board for the second day today, March 05, 2012. Feeder Cattle futures continued to make new contract highs over the prior several weeks resulting in an overbought condition, based on several momentum indicators. Along with the overbought condition, Corn Futures basis the May contract (CK12) traded up today into significant trendline resistance, which may have led to some nervousness in the Feeder Cattle market, leading up to profit taking. Feeder Cattle Futures basis the April contract (FCJ12) closed below trendline support today, possibly setting up the market for further downside action in the foreseeable future. Support for FCJ12 may come into play around the 156.00 area.

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.

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