For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, December 17, 2024, at 3:15 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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January Feeder Cattle gap opened higher, closed the gap and then raced to the high of the day, making the high at 260.725 and then fell back. It traded lower the rest of the session to the low at 258.10 and settled near the low at 258.35. Feeders followed the live cattle higher early but couldn’t challenge resistance at 261.05 and the December 2nd high at 261.20, falling short and then breaking down. It opened above trendline resistance and then fell back and closed below the trendline which came in at 258.95. The trendline comes in at 258.85 for Friday. The Feeder index took the opposite course of futures coming out after the close at a new all-time high at 263.07. Could this support Feeders on Friday. I think reports of the index being at a new high was out in the market already as most people I spoke with were saying the index was going to be above 263.00 during the session and why are futures failing to hold the opening rally. The decline stopped just above key support at 257.925 so with futures in between the two key levels, the Friday trade will be interesting. With a huge long position by funds and the market inching closer to year-end, will traders try to book profits with a weekend coming up. The Thursday rally also stalled below the Bearish Engulfing candle established at the previous high. It respected the candle. A downturn on the Friday open could lead to more slippage if traders panic despite the new high in the index. We’ll see!… If price holds settlement, it could test resistance at the Trendline. Resistance then comes in at 261.05. A breakdown from settlement could see a re-test of support at 257.925. Support is nearby at the rising short-term moving averages. The 13-DMA is at 257.40 and the 8-DMA is at 257.175.
The Feeder Cattle Index surged and is at 263.07 as of 12/11/2024.
February Live Cattle gap opened higher, closed the gap and surged to a new all-time high for the lead contract on the continuous chart at 192.70. It took out the previous high at 192.05, established in September 2023. The excitement over the new high was fleeting however as price collapsed, trading lower the rest of the session to the low at 190.65 and settling near the low at 190.85The futures excitement is all about the cash market which has continued to stun as it keeps on going higher as the packer struggles with both the retailer and the producer. The cutouts have been held in check, staying in a wide trading range from 324 to 296 with the market seemingly most comfortable between 310 and 315. The cutout did jump today, which could embolden producers even more and go for higher prices on Friday and then next week. Next Friday we get the cattle on feed report which could impact price going forward. The reversal candle on Thursday sets the stage for a potential Evening Star Candlestick formation if price breaks down on Friday. This could put pressure on long positions as we get closer to the holidays and the end of the year. This week’s cash average looks like it will leap forward yet again, keeping the pressure on the packer. This may not be enough to support futures however as with the end of the year coming and a failure at the new all-time high could lead to liquidation from funds with long positions who missed out selling at the high. We’ll see!… If price can’t hold settlement, it could test support at 190.075. Support then comes in at the rising 8-DMA now at 188.525. If settlement holds, we could see price re-test resistance at 192.05 and then the new all-time high at 192.70.
Boxed beef cutouts were higher as choice cutouts surged 4.01 to 315.24 and select jumped 2.37 to 280.48. The choice/ select spread widened and is 34.76 and the load count was 135.
Thursday’s estimated slaughter is 125,000, which is above last week’s 118,000 and last year’s 124,369. The estimated total for the week(so far) is 489,000, which is above last week’s 485,000 and below last year’s 503,183.
The USDA report LM_Ct131 states: So far for Thursday negotiated cash trading in the Southern Plains has been mostly inactive on light demand. In the Texas Panhandle, last week live FOB purchases traded from 190.00-191.00. In Kansas, the last reported market was on Tuesday with live FOB purchases at 191.00. In Nebraska and the Western Cornbelt negotiated cash trading has been slow with moderate to good demand. In Nebraska, live FOB purchases traded 1.00-2.00 higher from 195.00-196.00 when compared to the last reported market on Wednesday. Compared to last week, dressed delivered purchases traded 8.00 higher at 305.00, on a light test. In the Western Cornbelt, when compared to the last reported market on Wednesday, live FOB purchases traded 1.00-2.00 higher from 195.00-196.00. The last reported dressed delivered purchase market was on Wednesday at 302.00.
The USDA is indicating cash trades for live cattle from 189.00 – 196.00 and from 295.00 – 312.00 on a dressed basis (so far).
**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
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