August Feeder Cattle opened higher, rallied to the high of the day at 263.275 and then fell apart. It broke down the rest of the session to the low at 258.525. It settled near the low at 259.175. The breakdown took price below support at the rising 21-DMA now at 259.025 but, it was able to settle above it. With video auction sales going on futures were unable to take out the previous two sessions highs and the failure seemed to create nervousness with traders that price wouldn’t go any higher so, they decided to liquidate positions. Once the selling started, it gathered steam and the rout was on. The cash index rose over three bucks so cash fundamentals remain strong. The video auctions seemed strong and it will be interesting to see where the index lands once the auctions end later in the week. If price can’t hold the 21-DMA, we could test support at 257.925. The rising 50-DMA is next at 257.775. If settlement holds, it could revisit resistance at 261.05 and then 262.075. Resistance then comes in at 264.675.
The Feeder Cattle Index surged and is at 258.29 as of 07/05/2024.
August Live Cattle opened higher and tried to firm as it traded to the high of the day at 187.275. The market fell apart however as traders followed through to the downside the selloff that took price off the high it made on Friday, creating an evening star candlestick. The breakdown took price below the rising 13-DMA now at 184.775 and support at 184.35 to the low at 183.80. Settlement was right on the 184.35 support level. Cash fundamentals remain strong as last week’s cash average was at 197.09, a new all-time high and cutouts continue to show strength. This is running counter to the previous years’ seasonals as futures traders refuse to believe in the cash market. Cash prices have made new highs for 4-weeks in a row as we are in a new era (in my opinion) of lower cattle numbers that packers want more weight to be put upon. They are paying for it and keep chasing producers for cattle instead of sitting back and waiting for producers to come to them. They fake it early with low bids and try to delay as much as possible but in the end have been more aggressive and paying up at the end of the week. If price can hold settlement, it could test resistance at 185.75. Resistance then comes in at 187.725. If price can’t hold settlement, it could test support at the rising 21-DMA now at 182.825. Support then comes in at 182.575.
Boxed beef cutouts were mixed as choice cutouts ticked higher 0.04 to 330.47 and select decreased 0.34 to 304.72. The choice/ select spread widened and is at 25.75 and the load count was 89.
Monday’s estimated slaughter is 115,000, which is even with last week and below last year’s 122,120.
The USDA report LM_Ct131 states: Thus far for Monday in the Southern Plains and Nebraska negotiated cash trading has been at a standstill. In the Western Cornbelt negotiated cash trading has been inactive on very light demand. Last week in the Texas Panhandle live FOB purchases traded at 190.00. In Kansas last week live FOB purchases traded from 190.00-193.00. For the prior week in Nebraska live FOB purchases traded at 198.00 and dressed delivered purchases traded at 314.00. In the Western Cornbelt for the previous week live FOB purchases traded from 198.00-200.00 and dressed delivered purchases traded from 312.00-315.00.
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, July 09, 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.
**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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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