Walsh Trading Daily Insights
Commentary
November Feeder Cattle opened on the low at 174.525, raced to the high at 177.10, pulled back and consolidated the rest of the session to settle at 176.05. The rally took price past resistance at 175.80 and just under the 100-DMA at 177.35. Strength in Live cattle and outside markets helped Feeders gain some footing on Monday. A failure from settlement could see the September 29th low at 174.225 tested. Support then comes in at 173.325. If price holds settlement, we could re-test resistance at the 100-DMA. Resistance then comes in at 178.95.
The Feeder Cattle Index down ticked and is at 175.44 as of 9/30/2022.
December Live Cattle opened at its low (147.475), rallied to the session high at 148.70 and pulled back near the low and settled at 148.05. A weaker Dollar and strong Equity markets helped reverse Friday’s decline on Monday. It will be an interesting week for Cattle as lower cutouts will provide incentive for packers to try to drive cash prices lower as producers aim for higher prices. Packers’ margins have come down quite a bit and they would love to reverse the downtrend. Demand seems to be holding up well in spite of an extremely high Dollar as export sales are solid and domestic demand remains surprisingly strong in my opinion. So, slaughter will remain robust (in my opinion) and if supplies are in decline the packer will have to pay up for cattle at some point (in my opinion). The battle continues… If settlement holds, we could test resistance at the Monday high. A break out above the high should face resistance at 149.375. A break down from the low could see support tested at the rising 21-DMA now at 146.90. Support then comes in at 146.825 and then 145.225.
Boxed beef cutouts were higher as choice cutouts increased 2.19 to 245.94 and select increased 1.18 to 221.31. The choice/ select spread widened and is at 24.63 and the load count was 116.
Monday’s estimated slaughter is 127,000, which is above last week’s 125,000 and last year’s 120,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been at a standstill in all major feeding regions. Last week in the Southern Plains live purchases traded at 143.00. In Nebraska and the Western Cornbelt, live and dressed purchases traded at 145.00 and 228.00, respectively.
The USDA is indicating no cash trades for live cattle and on a dressed basis (so far).
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks) and our next webinar will be on Thursday, October 6, 2022 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
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