Will back-month Cattle mooove higher?
Live Cattle: Friday’s USDA Cattle on Feed report on the surface looks bullish, according to Cattle traders, especially for the fall and winter month contracts, however some think that this could turn into a “buy the rumor, sell the fact” trade this morning. First the numbers: on-feed July 1st 99.0% vs. estimates of 99.5%, placed in June 85% vs. estimates of 90.3%, and marketed in June 97% vs. estimates of 96.5%. The real surprise was the placements figure, which should help support the October and December contracts, as there should be less fed cattle available come the fall. However, October Cattle is already trading nearly $6.00 above the nearby August contract, which has some traders believing the market has already priced in the lower placements. Support for October Cattle comes in at 96.20, with resistance found at 97.57. October Live Cattle closed at 96.60, up 0.15.
Pork Bellies: Friday’s monthly USDA’s Cold Storage report may bring bulls stampeding back to the belly pit, as belly stocks came in below even the low end of analysts’ estimates. The USDA estimated belly stocks at 47.7 million pounds, well below the average estimate around 51 million pounds. This could help the August contract move to the upper end of its recent 650 point trading range. Support for August Pork Bellies is seen at 85.50, with resistance found at 92.17. August Pork Bellies closed at 87.25, down 1.05.
Natural Gas: The minor short-covering rally in Natural Gas futures last week has come to an end, as the lead month August contract fell to lows not seen since early January on the weekly nearby chart, as traders react to weather forecasts calling for the above normal temperatures headed to the Midwest this week to be short-lived. In addition, the lack of any signs of tropical disturbances in the Atlantic have traders removing some of the “risk premium” out of the August contract that will expire on Friday. Support comes in at 6.000, with resistance seen at 6.380. In early trade, August Natural Gas is trading at 6.177, down 0.269.
