Cash traded from 122.00 – 126.00 on a live basis (depending on region) with the bulk traded at 123.00. Dressed sales ranged from 197.00 – 200.00 with the bulk at 197.00. Slaughter is estimated to be 610,000. Cutouts remain high as Monday cutouts showed choice up 0.39 to 217.40 while select dipped 0.42 to 211.61 on light to moderate demand and offerings. The choice/ select spread widened to 5.79. Weather issues remain on traders’ minds as winter storms continue to impact cattle regions. April Live Cattle inched higher today reaching 127.55 which is just shy of January 16th high at 127.80. With cutouts strong anticipation for packers to pay up for cattle is high. The fact packers have avoided paying higher prices except in isolated trades has escaped traders’ minds. They have been able to slow down slaughter, keep cash price stable and keep cutouts high for this time of year. They are focused on their margins and are succeeding in in keeping them higher than usual for this time of year. Resistance is at 128.10. A close above here could lead to a test of resistance at 129.825. A close below 126.625 sets up a retest of support at 125.80 and then 124.30.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, January 31st 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.* *
Senior Market Strategist
Walsh Trading, Inc.
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.