Commentary: April Live Cattle continued its plunge on Friday, February 28th. Futures gap opened lower and traded down limit before staging a rally that closed the gap. Futures traded with the equity markets for the session. Rallying when equities rallied and breaking down when equities broke down. Equities were weak at the open and then rallied and were volatile for its entire trading session. Unfortunately for cattle, equities were weak at the cattle close and the April contract broke down to its limit move for the day. Fortunately, it didn’t settle down limit as it settled at 107.575 down 2.90. Resistance is at 108.65, and then 10960. Support is at 107.30, 106.025 and then 104.85. Beef cutout values are much lower than last year at this time and carcass weights are way above last year plus fears of potential spread of the coronavirus in the US continue to weigh on traders’ minds. It was a volatile week in the cash market as live cattle traded in a range from 112.00 to 117.50 and dressed from 178.00 to 187.00. Boxed Beef cutouts were lower on light to moderate demand and moderate offerings. Choice cutouts decreased 0.24 to 205.30 and select was down 0.78 to 198.91. The choice/ select spread widened to 6.39 and the load count was 104. Slaughter was estimated to be 115,000. Saturday slaughter is expected at 25,000 to bring the weekly estimate to 627,000. Last week it was at 628,000 and last year it was at 609,000.
Trade Suggestion(s):
N/A today
Risk/Reward:
Futures –
Options –
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, March 5th 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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