Make a Bet on Cattle Prices Rising from Here with This Trade

Barchart · 1d ago

December live cattle (LEZ26) futures present a buying opportunity on more price strength.

See on the daily bar chart for December live cattle futures that prices have rebounded from the September low and a bullish head-and-shoulders bottom reversal pattern appears to be forming. It’s my bias that the cattle futures markets have put in near-term price bottoms.

Fundamentally, last week’s USDA monthly cattle-on-feed report showed the lowest number of U.S. cattle placed on feed and cattle marketings were both the lowest since the report’s inception decades ago. Consumer demand for beef remains strong.

A move in December live cattle futures above chart resistance at this week’s high of $222.375 would give the bulls more power and it would also become a buying opportunity. The upside price objective would be $237.50 or above. Technical support, for which to place a protective sell stop just below, is located at $216.00.

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IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. 


On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.