Walsh Trading Daily Insights
Commentary
April Feeder Cattle opened lower at 197.475. This was the high of the day as price broke down and traded to the session low at 195.75. The low came in just before 10:30AM CDT and is just above support at 195.40. Bulls came back into the market and price rallied the rest of the session and came close the session high. Settlement was near the high at 197.075. Outside market forces helped put fear into the livestock markets early in the session, but weaker corn and the equity markets stabilized to help Feeders push higher. If Feeders can hold settlement, price could test resistance at 197.975. Resistance then comes in at 200.75. A failure settlement could see price revisit the Monday low and then support at 195.40. Support then comes in at 193.00.
The Feeder Cattle Index increased and is at 189.87 as of 03/10/2023.
April Live Cattle gap opened lower and broke down to the session low at 162.525. Trading down to the low took price below support at 162.725 as worries that banks were in imminent danger caused a route in most commodities. With the government saying they will protect investors from these bank failures, a calming effect took over and cattle rallied to the session high at 164.00. The rally didn’t last and price settled at 163.55, leaving a small gap on the chart. The gap is from Friday’s low at 164.225 to the Monday high. The high couldn’t challenge resistance at 164.90 and settlement was above support, while forming a Doji candlestick. This indicates indecision in the market and a positive open on Tuesday could see the gap closed and resistance at 164.90 tested, in my opinion. Resistance then comes in at 166.975. A failure to test resistance could see price revisit the Monday low. Support then comes in at 161.75.
Boxed beef cutouts were mixed as choice cutouts down ticked 0.05 to 284.86 and select was jumped 2.08 to 273.62. The choice/ select spread narrowed and is at 11.24 and the load count was 83.
Monday’s estimated slaughter is 125,000, which is even with last week and above last year’s 123,000.
The USDA report LM_Ct131 states: Thus far for Monday in the Texas Panhandle negotiated cash trading has been at a standstill. In Kansas, Nebraska and Western Cornbelt negotiated cash trading has been mostly inactive with very light demand. Not enough purchases for a market trend in any region. The latest established market was last week in these regions. In the Southern Plains and Nebraska live purchases traded at 165.00, and dressed purchases, in Nebraska, traded at 265.00 In the Western Cornbelt live and dressed purchases traded from 164.00-167.00 and at 265.00, respectively.
The USDA is indicating cash trades for live cattle from 164.00 – 166.00 and at 265.00 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, March 16, 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.
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.