Livestock Commentary

Ben DiCostanzoGeneral Commentary

March Feeder Cattle opened higher, grinded to a new high for the recent up move at 241,925 and then plummeted to the session low at 238.40. It settled near the low at 238.625. The rally stalled below resistance at 242.475 and took out support at 240.875, on its way to test the 238.35 support level. The low and settlement was above support which is a positive and it is still above the rising 200-DMA at 237.95 which is also positive for the market. The negative is it opened higher and reversed course closing lower on the day creating uncertainty, in my opinion. The cash index has continued to move higher narrowing its deficit to the futures market which could provide some support to futures. If futures can hold settlement, we could revisit resistance at 240.875 and then the Friday high. A surge past the high could set price on a path towards resistance at the gap from 242.375 to 242.675on the continuous chart, with long-term resistance at 242.475. Resistance then comes in at the 61.8% retracement level at 243.475 (the all-time high at 264.675 to the 209.15 low). A failure below the 200-DMA could see support tested at 237.25 and then the 50% retracement at 236.90. The declining 100-DMA is next at 236.35.

The Feeder Cattle Index increased and is at 234.15 as of 01/26/2024. 

April Live Cattle opened lower and rallied strongly through late morning to the high at 183.45. The rally took price past resistance at 182.575 and stalled just below the upper end of the gap from 183.275 to 183.525. It repeatedly attempted to close the gap but failed and price crashed. It broke down to the low of the day at 180.975 and settled near the low at 181.225. The low took out support at 181.175 but settlement was above it. The price action formed a shooting star candlestick and follow-through lower on Tuesday could lead to a bearish evening star candlestick pattern. This could be a topping type of price action and lead to an unwelcome pullback for bullish traders and producers. Producers are hopeful that cash will continue higher this week but the pattern could give packers the ability to pull back the cash price after paying up for cattle last week. Cash was at a standstill on Monday with producers and packers getting their ducks in a row for potential trade later in the week as showlists and packer needs are discovered. If futures can hold settlement, it could re-test resistance at 182.575. Resistance then comes in at the gap from 183.455 to 183.525 on the continuous chart. If futures pullback from the 61.8% retracement level at 180.725, it could test support at 179.40. Support then comes in at the 100-DMA now at 178.30 and the nearby 178.10 support level.

Boxed beef cutouts were lower as choice cutouts decreased 1.11 to 299.42 and select decreased 0.31 to 288.82. The choice/ select spread narrowed and is at 10.60 and the load count was 68.

Monday’s estimated slaughter is 125,000, which is above last week’s 115,000 and last year’s 119,892. 

The USDA report LM_Ct131 states: Thus far for Monday in all trading regions negotiated cash trade has been at a standstill. Last week in the Texas Panhandle live FOB purchases traded at 175.00. Last week in Kansas live FOB purchases traded from 174.00-175.00, mostly at 175.00. Last week in Nebraska live FOB purchases traded from 175.00-177.00 and dressed delivered at 277.00. Last week in the Western Cornbelt live FOB purchases traded from 174.00-177.00 and dressed delivered purchases traded at 277.00.

The USDA is indicating no cash trades for live cattle and on a dressed basis (so far).

For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, January 30, 2024, at 3:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.

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**Call me for a free consultation for a marketing plan regarding your livestock needs.**

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

www.walshtrading.com

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.​
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