Walsh Trading Daily Insights
Commentary
November Feeder Cattle consolidated within Monday’s trading range forming an inside candlestick. The high was at 176.775 and the low at 174.725. It settled at 175.20. It revolved around the 175.70 support level, settling below it. A failure from settlement could see the September 29th low at 174.225 tested. Support then comes in at 173.325. If price holds settlement, we could re-test resistance at the 100-DMA, now at 177.40. Resistance then comes in at 178.95.
The Feeder Cattle Index increased and is at 175.67 as of 10/03/2022.
December Live Cattle had a difficult day on Tuesday. It tried to overtake resistance at the rising 13-DMA (148.275) making the high just above it at 148.525 and then turned lower. It fell to the low at 147.40 and then spent the rest of the session meditating. It hung around the low and settled at 147.50. Cash was very quiet as packers hope the inability of futures to rally on strong outside markets leads to lower cash trading. If settlement holds, we could re-test resistance at the 13-DMA. A break out above the high should face resistance at 149.375. A break down from the low could see support tested at the rising 21-DMA now at 147.025. Support then comes in at 146.825 and then 145.225.
Boxed beef cutouts were higher as choice cutouts increased 2.19 to 245.94 and select increased 1.18 to 221.31. The choice/ select spread widened and is at 24.63 and the load count was 116.
Tuesday’s estimated slaughter is 128,000, which is even with last week and above last year’s 122,000. The estimated total for the week (so far) is 255,000, which is above last week’s 253,000 and last year’s 242,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading has been mostly inactive on very light demand in Nebraska and the Western Cornbelt. Not enough purchases for a market trend. Negotiated cash trading has been at a standstill in all other major feeding regions. Last week in the Southern Plains live purchases traded at 143.00. In Nebraska and the Western Cornbelt, live and dressed purchases traded at 145.00 and 228.00, respectively.
The USDA is indicating cash trades for live cattle at 148.00 and nothing 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, October 6, 2022 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.