Walsh Trading Daily Insights
Commentary
May Feeder Cattle opened unchanged and traded to the session low at 205.25. It reversed course and traded higher the rest of the session to the high at 207.95. The rally and settlement price took price past resistance at 207.50 and approached resistance at 208.50. Continued enthusiasm in the cattle markets for higher cash prices plus a weakening corn market sparked Feeders on this day, in my opinion. A rally past 208.50 puts resistance at 210.30 in play. If price trades below 207.50, we could see a test of support at 205.15.
The Feeder Cattle Index decreased and is at 193.01 as of 04/10/2023.
June Live Cattle made a new high for the recent up move, reaching 164.525. It stalled here and settled at 163.95. The low was at 163.95. It formed a Doji candlestick at the high point of the recent rally, just below resistance at 164.90, indicating indecision in the market. Cash has been quiet so far this week, but the few mandatory report prints show prices staying strong. Cutouts are also climbing even though the load count has shrunk. Packers will wait till later in the week to establish price for cash, in my opinion as they hope for a pullback in futures to incentivize producers to sell at lower prices. In this tight supply environment, it may be time for the packers wishful thinking to be snuffed. A continuation higher could see resistance at 164.90 tested, and a break out above here could see price move towards resistance at 166.975. A breakdown from settlement could see support tested at 162.725.
Boxed beef cutouts increased as choice cutouts jumped 2.19 to 295.10 and select surged 3.64 to 282.04. The choice/ select spread narrowed and is at 13.06 and the load count was 88.
Tuesday’s estimated slaughter is 126,000, which is even with last week and last year. The estimated total for the week (so far) is 239,000, which is below last week’s 243,000 and last year’s 249,000.
The USDA report LM_Ct131 states: So far for Tuesday negotiated cash trading has been at a standstill in the Southern Plains. In Nebraska and Western Cornbelt negotiated cash trading has been mostly inactive on very light demand. Not enough trades for a market trend. The latest established market was last week in all regions. In the Southern Plains live purchases traded at 170.00. In Nebraska and Western Cornbelt live and dressed purchases traded from 174.00-177.00 and from 275.00-280.00, respectively.
The USDA is indicating cash trades for live cattle 175.00 and at 284.00 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, April 13, 2023 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
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