Commentary: Livestock markets continued their plunge as coronavirus fears and panic continues to grow. With travel bans, multiple event cancellations, sports suspensions and workers being told to stay or work from home demand destruction expectations continue to rise. You also have production soaring with huge slaughter numbers and weights much higher than last year providing the setting for a so-called perfect storm in the livestock markets. I think there is also worry about slowdowns in processing plants as we go forward. What happens if someone comes down with the virus? Is that inflationary for beef prices and will it cause cattle to be backed up in a time of seasonally growing supply further suppressing cattle prices? Stay tuned! Resistance is at 96.10, 97.075, 99.375 and then 100.275. Support is at 94.30, 93.40, 92.15 and 91.05. Cash trade took place this week from 105.00 to 110.00 on a live basis and from 170.00 to 176.00 on a dressed basis. Boxed Beef cutouts surged on good demand and heavy offerings. Choice cutouts increased 2.13 to 208.14 and select was up 4.10 to 201.98. The choice/ select spread narrowed to 6.16 and the load count was 153. Slaughter was estimated to be 101,000 for Friday and Saturday’s expected slaughter is to be 44,000. This will bring the weekly estimate to 630,000. Last year’s slaughter for this week was 608,000.
Trade Suggestion(s):
N/A today
Risk/Reward:
Futures –
Options –
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, March 19th 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
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bdicostanzo@walshtrading.com
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