September Feeder Cattle opened higher and traded to the high of the day at 242.65. It reversed course and traded lower the rest of the session to the low at 239.15. It settled near the low at 239.50. The early strength challenged resistance at the declining 8-DMA now at 242.30 and resistance at 242.475. Resistance held and price retraced about half of Friday’s rally, settling in the middle of Friday’s range. The cash fundamentals have weakened as the index has come down towards futures, narrowing the spread between the futures and cash. If price can’t hold settlement, we could re-test support at 238.35 and then 237.25. If it holds settlement, it could test resistance at 240.875 and move towards the declining 8-DMA.
The Feeder Cattle Index fell and is at 245.57 as of 08/09/2024.
October Live Cattle opened higher and traded to the high at 181.50. It was able to trade above resistance at 181.175 and then took out the Friday high at 181.40 but, couldn’t sustain the strength, breaking down the rest of the session to the low at 179.85. The breakdown took price below the declining 100-DMA now at 180.10, settling below it at 180.025. Price traded in the upper end of Friday’s trading range but the close below the 110-DMA keeps the bullish traders on edge. Cash prices declined last week and packers are trying to paint a negative picture for this week as it slashed slaughter on Monday to 112,000. Slaughter is expected to remain below 600,000 for this week as showlists are mixed with Texas/ Kansas lower and Nebraska higher. If price can reclaim the 100-DMA, it could re-test resistance at 181.175. Resistance then comes in at 182.475. If price can’t hold settlement, it could re-test support at 179.40. Support then comes in at the 200-DMA now at 179.125.
Boxed beef cutouts were higher as choice cutouts jumped 3.12 to 315.83 and select increased 1.58 to 300.17. The choice/ select spread widened and is at 15.66 and the load count was 99.
Monday’s estimated slaughter is 112,000, which is below last week’s 119,000 and last year’s 118,469.
The USDA report LM_Ct131 states: Thus far for Monday the Southern Plains and Nebraska negotiated cash trade has been at a standstill. Last week in the Texas Panhandle live FOB purchases traded at 186.00. Last week in Kansas live FOB purchases traded from 185.00-187.00, with live delivered purchases ranging mostly from 190.00-190.50. Last week in Nebraska live FOB traded at 193.00, with a few up to 194.00. For the week dressed delivered purchases traded at 305.00. In the Western Cornbelt negotiated cash trade has been mostly inactive on very light demand. Last week in the Western Cornbelt live FOB purchases from 190.00-193.00, with the bulk at 193.00, while dressed purchases traded at 305.00.
The USDA is indicating cash trades for live cattle at 191.00 and nothing on a dressed basis (so far).
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, August 13, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
tested support at the
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.