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Cattle Futures Technical Analysis - Cattle Futures Trading: 2017-09-18
Higher US beef consumption and exports bullish for live cattle
US beef consumption and exports are forecast to rise. Will live cattle price continue rallying?
The recent US Department of Agriculture WASDE report estimated US per capita demand for beef will grow by 3.6% this year, to 57.6 pounds. The per capita beef demand is forecast to grow also in 2018 another 1.6%, third annual gain in a row. US beef exports are also forecast to rise as US gained access to Chinese market. Increasing domestic consumption and export demand for beef are bullish for live cattle prices.
On the daily timeframe LCATTLE: D1 has been rising after hitting nine-month low in late August. It has breached above the resistance line.
- The Donchian channel indicates uptrend: it is tilted up.
- The Parabolic indicator has formed a buy signal.
- The MACD indicator is bullish: it is below the signal line and the gap is narrowing.
- The stochastic oscillator is rising but has not reached the overboughr zone.
We believe the bullish momentum will continue after the price closes above the upper boundary of Donchian channel at 112.16. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the last fractal low at 108.7. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (108.7) without reaching the order (112.16), we recommend cancelling the position: the market has undergone internal changes which were not taken into account.
Technical Analysis Summary
| Position | Buy |
| Buy stop | Above 112.16 |
| Stop loss | Below 108.7 |
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