Date: March 21, 2025
Author: John S. Simpson Jr., Senior Market Strategist, Walsh Trading
Overview
The livestock markets continue to display resilience and trend-following behavior as we head into the final stretch of March. Today’s focus highlights recent price action across live cattle, feeder cattle, and lean hogs, alongside positioning data from the latest CFTC Commitments of Traders (COT) report, technical levels, chart setups, and broader market sentiment.
Live Cattle (LEJ25)
Live cattle futures (April contract) have maintained their bullish trajectory. Our long position at $192.50, initiated on March 4th, 2025, was confirmed with an uptrend break above $195.60. The initial target of $200.00 has now been reached, with the next upside target pegged at $210.00.
Key technical levels:
- Support: $195.60
- Resistance: $210.00
- Indicators: MACD remains in bullish territory; Williams %R suggests slight overbought conditions—watch for divergence.
Volume has started to taper, and open interest shows signs of softening—classic signals to watch closely for a potential peak. Commercial buying remains strong, while managed money is adding length but at a slower pace, indicating cautious optimism.
Feeder Cattle (GFJ25)
Feeder cattle respected key support at $264.00, rebounding smartly. Our long position at $268.00 from February 24th reached its initial target of $280.00. Current momentum keeps us focused on the next upside targets at $290.00 and $295.00.
Technical snapshot:
- Support: $264.00
- Resistance: $295.00
- Indicators: MACD shows strong bullish crossover; Williams %R hovering around mid-range, room to run.
COT data shows commercials holding steady short positions as feeders rally, while managed money continues to support the move higher. This aligns well with seasonal tendencies and firm cash cattle prices.
Lean Hogs (HEJ25)
Lean hogs experienced a sharp decline earlier this month but have since found footing. Our long at $83.00 on March 5th was confirmed with an uptrend above $87.31, signaling a rebound. Next targets are $90.50 and $93.00. However, the market is currently in a pullback phase and must hold key support at $85.50.
Technical outlook:
- Support: $85.50
- Resistance: $93.00
- Indicators: MACD lines starting to converge—watch closely; Williams %R signaling potential bounce from oversold territory.
The latest COT shows managed money reducing long positions while commercials are modestly adding to longs—suggesting a short-term consolidation before a possible next leg higher.
COT Report Highlights (Week Ending March 18, 2025)
- Live Cattle: Managed money net long positions increased by 4,500 contracts, reflecting renewed speculative interest. Commercials added to their short positions, historically coinciding with elevated price levels.
- Feeder Cattle: Managed money remains net long but reduced exposure slightly, likely locking in profits as prices approach resistance.
- Lean Hogs: Managed money trimmed long positions for the third consecutive week, reflecting caution. Commercials increased long positions marginally, viewing current levels as value.
Market Sentiment & Trends
Fundamentally, tighter cattle supplies and strong packer margins continue to underpin bullish sentiment in both live and feeder cattle markets. For lean hogs, the market is navigating seasonal weakness, but solid export numbers (particularly from Asia) and lower production estimates provide underlying support.
Technically, all three markets remain within established uptrends, though caution is warranted as we approach significant resistance levels.
Chart Analysis Summary
| Contract | Current Price | Support Levels | Resistance Levels | MACD | Williams %R | Trend |
|---|---|---|---|---|---|---|
| LEJ25 (Live Cattle) | $200.00 | $195.60 | $210.00 | Bullish | Slightly Overbought | Up |
| GFJ25 (Feeder Cattle) | $280.00 | $264.00 | $295.00 | Bullish Crossover | Neutral | Up |
| HEJ25 (Lean Hogs) | $87.50 | $85.50 | $93.00 | Neutralizing | Oversold Bounce | Up (Pullback) |
Final Thoughts
In my opinion, the livestock markets are favoring the bull side, but it’s essential to remain vigilant for signs of exhaustion, especially as key resistance levels are approached and volume starts to decline. Watching COT positioning, commercial hedging, and technical indicators will be critical over the next few sessions.
This afternoon’s USDA livestock report will likely offer further clarity—especially regarding supply constraints and cash market activity.
Until we meet again, may your risk be measured, your gains be steady, and your vision be clear.
Sources:
- CME Group Price Data
- CFTC Commitments of Traders Report (March 18, 2025)
- USDA Livestock Reports
- Walsh Trading Market Insights
Disclosures:
As always, this is just my opinion and should not be considered as financial advice. Market conditions can change rapidly, and it’s essential to stay informed and manage risk accordingly.
If you’re looking to navigate these markets with confidence, consider opening a futures trading account today. Let’s turn these insights into actionable strategies for your portfolio.
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John S. Simpson Jr.
Senior Market Strategist
Walsh Trading
[email protected]
Direct: 1-312-957-8108 | Toll Free: 1-800-556-9411
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