May Feeder Cattle made a new low for the down move at 234.675, stopping just above support at 234.475. Price rebounded, rallying the rest of the session to the high at 238.85. The rally took price past resistance at 238.35 but it couldn’t stay above it, settling at 238.15. The cash index has been falling the past couple of days as the futures break down has caused a pause in the aggressive buying of feeder weight cattle, in my opinion. The rally in futures did take price back above the 100-DMA now at 237.25. That in my opinion is a positive for Feeders, as the price action the past 5 sessions has been testing this major support level. If futures fail from settlement, we could re-test support at 237.25 and the rising 100-DMA. Support then comes in at 235.95. The Thursday low and then 234.475 must contain any selling on Friday as a failure here could be difficult to overcome as we end the week. A rally past the Thursday high could see price test resistance at the declining 8-DMA now at 240.10. Resistance then comes in at 240.875.
The Feeder Cattle Index dropped and is at 243.65 as of 04/10/2024.
June Live Cattle continues to trade within Fridays break down candle. It was able to overcome early weakness, making the low at 171.925, which was a test of support at 172.75. The rally took price to the high at 174.45 and it settled near the high at 173.90. The recovery took price past resistance at 174.425 (barely) but once again it couldn’t hold the rally. This was also another test of the declining 8-DMA which the past 3 sessions has stopped the rallies. Trading above and holding above the 8-DMA could signal a change in sentiment, but continued rejections could see price make an attempt at a new low. The cash market is hanging in there, coming down but not giving in. Cutouts are the problem as they have not been able to take advantage of seasonal tendencies, causing packers and producers problems. I think the market is continuing to expect negative information and bearish results out of this Bovine Influenza A Virus, which has now entered North Carolina dairy but still has not affected beef cattle. It is always something that gets in the way of producers that is out of their control. Frustrating. Futures closed below the 8-DMA. This keeps the pressure on futures. If futures fail from settlement, it could test support at 172.75. Support then comes in at the April 5th low at 171.40. If futures can rise above the 8-DMA, it could test resistance at 175.95.
Boxed beef cutouts were mixed as choice cutouts ticked higher 0.14 to 298.37 and select decreased 0.87 to 295.15. The choice/ select spread widened and is at 3.22 and the load count was 124.
Thursday’s estimated slaughter is 124,000, which is above last week’s 122,000 and below last year’s 124,873. The estimated total for the week (so far) is 482,000, which is above last week’s 474,000 and below last year’s 485,574.
The USDA report LM_Ct131 states: Thus far for Thursday in the Texas Panhandle negotiated cash has been slow on light demand. There have been a few early live FOB purchases at 182.00, however not enough purchases for a market trend. Last week live FOB purchases traded at 184.00. In Kansas negotiated cash trade has been moderate on trade and demand. Compared to last week live FOB purchases traded 1.00-2.00 lower at 182.00. In Nebraska negotiated cash trade has been slow on light demand, however not enough purchases for an adequate market test. Last week live FOB purchases at 187.00 and dressed delivered purchases from 296.00-297.00. In the Western Cornbelt negotiated cash has been moderate on trade and demand. Compared to Wednesday live FOB purchases traded steady at 185.00. Compared to last week dressed delivered purchases traded at 4.00 lower mostly at 293.00.
The USDA is indicating cash trades for live cattle from 170.00 – 186.00 and from 288.00 – 295.00 on a dressed basis (so far).
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, April 16, 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
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Fax: 312.256.0109
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