Commentary: April Live Cattle gap opened lower as equity markets were once again tanking on continued coronavirus fears. Equity markets temporarily bounced leading to some closure of the gap, but a resumption of the decline sent cattle into a tailspin, eventually going down limit (briefly) at the end of the day. It settled at 105.75 down 2.90 from Thursday’s settlement. Feeder Cattle also suffered dropping 3.60 to settle the April contract at 130.50. Hogs were immune to the equity debacle, settling the April contract at 65.925 up .55 on the day. Cattle markets are trading with the equity markets, especially to the downside and not necessarily in accordance to its fundamental outlook. I think the markets need to see at least some stabilization in the equities before resuming its seasonal tendencies. The longer it remains tied to the outside markets the less likely a seasonal advance can take place as the seasonals turn negative into June, in my opinion. Resistance is at 107.30 and then 108.65. Support is at 104.85 – 104.20, 103.00 and then 101.65. Cash traded from 112.00 – 115.50 on a live basis and from 180.00 -182.00 on a dressed basis this week. Boxed Beef cutouts were higher on moderate to fairly good demand and light to moderate offerings. Choice cutouts increased 0.22 to 207.47 and select was up 1.51 to 202.57. The choice/ select spread narrowed to 4.90 and the load count was 103. Slaughter was estimated to be 119,000. Saturday Slaughter is expected to be 38,000 bringing the weekly estimate up to 647,000. Last week’s slaughter was a healthy 627,000 and last year’s slaughter was 607,000.
Trade Suggestion(s):
N/A for Today
Risk/Reward:
Futures –
Options –
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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