November Feeder Cattle was pounded on Tuesday, opening lower and making the high at 262.90 and falling apart to the low at 256.25. It settled near the low at 256.875. High Feeder futures finally, in my opinion led to a break down in price as the Feeder Index has stalled and traders wanted out. The breakdown took price below support at 257.925 and puts support at 254.30 in traders’ crosshairs. Support then comes in at the rising 50-DMA, now at 253.225. If price can reclaim resistance at 257.925, a test of resistance at the 21-DMA now at 258.975 is possible. Resistance then comes in at the 13-DMA now at 260.775.
The Feeder Cattle Index decreased and is at 253.90 as of 9/25/2023.
December Live Cattle was slammed as outside market (Equities) weakness and cutout weakness hampered sentiment. Cutouts were weak for the morning report and broke down below the 300 level in the afternoon report. This plus cash trading 87,000 head last week and 20,000 of it was with time is leading some to expect packers to pull back on bids, claiming they don’t need the cattle and will cut back on slaughter even more than they have been. Producers don’t agree with this and most I spoke with believe at least steady cash prices with last week. Cash hasn’t moved much in the past few weeks, so the steady price thoughts do hold some weight. Futures made the high early at 191.35 and then broke down to the low at 188.425. It settled near the low at 188.475. The decline stalled just above support at the rising 13-DMA now at 188.20. A breakdown below here could see price approach support at 185.75. The rising 21-DMA is nearby at 185.525. If futures hold settlement, it could test resistance at 190.075. Resistance then comes in at the all-time high at 192.05.
Boxed beef cutouts were lower as choice cutouts fell 1.94 to 299.54 and select decreased 1.35 to 279.10. The choice/ select spread narrowed and is at 20.44 and the load count was 157.
Tuesday’s estimated slaughter is 128,000, which is above last week’s 127,000 and below last year’s 129,000. The estimated total for the week (so far) is 255,000, which is above last week’s 248,000 and last year’s 252,000.
The USDA report LM_Ct131 states: Thus far for Tuesday in the Southern Plains and Nebraska negotiated cash trade was at standstill. In the Western Cornbelt negotiated cash trade was slow on light demand. The most recent market trend in any region was last week. In the Southern Plains live FOB purchases traded at 183.00. Last week in Nebraska live FOB purchases traded from 184.00-185.00, with dressed delivered purchases trading at 292.00. In the Western Cornbelt live FOB purchases traded from 185.00-186.00, dressed delivered purchases traded at 292.00.
The USDA is indicating cash trades for live cattle at 184.00 and from 290.00 – 293.00 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, September 28, 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
888.391.7894
Fax: 312.256.0109
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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