May Feeder Cattle opened higher, made the session low at 234.70 and then rallied to the high at 239.50. Price pulled back, consolidated and settled at 238.00. The rally took price past the declining 8-DMA now at 238.225and resistance at 238.35. Resistance held with the settlement below both levels keeping bears in control of the market, in my opinion. The positive of Monday’s trade was rallying past settling above the 100-DMA which is at 237.425. The cash index fell on Monday which will keep pressure on Feeders. If futures fail from settlement, we could re-test support at 237.25. Support then comes in at 235.95. A rally past 238.35 could see price test resistance at 240.875. Resistance then comes in at the declining 13-DMA now at 241.025.
The Feeder Cattle Index dropped and is at 241.07 as of 04/12/2024.
June Live Cattle saw a strong open with the low coming in at 172.325 and the market racing to its high at 175.625. The rally was over by 9:35 and it worked lower the rest of the session to settle at 173.825. It looked like some short-covering after a quiet weekend on the virus front and a cash market that was lower last week but still in better standing than the futures market. The recovery took price past resistance at a few levels but once again it couldn’t hold the rally. This was another test of the declining 8-DMA which the past week has stopped the rallies. This is the only level of the surge that survived the breakdown. The 8-DMA now stands at 173.50 and will likely open lower on Tuesday. The other levels that the market couldn’t sustain were resistance at 174.425 and the declining 13-DMA now at 174.975. The rally also stalled below resistance at 175.95. Just like Feeders, this keeps bears in control of the price action. The positive of this price action is, in my opinion, that the market tested these levels. The cash market is hanging in there, coming down but not giving in last week. It is quiet so far to start the week as producers and packers prepare for the week. Cutouts continue to struggle with a mixed Monday trade and a low load count. If futures fail from the 8-DMA, it could test support at 172.75. Support then comes in at the April 5th low at 171.40 and then 170.375. If futures can hold settlement, it could re-test resistance.
Boxed beef cutouts were mixed as choice cutouts increased 0.31 to 300.88 and select fell 4.20 to 291.34. The choice/ select spread widened and is at 9.54 and the load count was 90.
Monday’s estimated slaughter is 121,000, which is even with last week and below last year’s 122,057.
The USDA report LM_Ct131 states: Thus far for Monday in all trading region negotiated cash has been at a standstill. Last week in the Southern Plains live FOB purchases traded at 182.00. Last week in Nebraska live FOB purchases traded at 184.00 while dressed delivered purchases traded at 293.00. Last week in the Western Cornbelt live FOB purchases traded at 185.00 and dressed delivered purchases mostly at 293.00.
The USDA is indicating no cash trades for live cattle and 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
888.391.7894
Fax: 312.256.0109
www.walshtrading.com Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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