Walsh Trading Daily Insights
Commentary
November Feeder Cattle opened higher and made its way to the high at 176.75. This is right at resistance at the 13-DMA. This proved to be too much for bulls and the market leaked lower to the low at 175.35. It settled nearby at 175.625. Feeder Cattle is in a trading range from 178.35 to 174.225. The decline took price below support at 175.70. Ending the week on like this puts pressure on Feeders to reverse course on Monday. A breakdown from settlement could see price revisit the low end of the range. Support then comes in at 173.325. If price can reclaim the key level at 175.70, price could revisit the declining 13-DMA. Resistance then comes in at the rising 100-DMA, now at 177.675.
The Feeder Cattle Index decreased and is at 174.92 as of 10/06/2022.
December Live Cattle opened higher and traded down to the session low at 147.525. Optimism returned to the market and price rallied to the high at 148.575 by mid-session. It was too much of a good thing for the market and it fell back and settled at 148.05. With cash ending the week stuck in its trading range, there was little incentive to push price higher. The low came just above support at the rising 21-DMA (147.50), so there was little incentive to press to the down side. Cattle is stuck in a trading range between 148.70 and 146.90. A break out above the high should face resistance at 149.375. A break down below settlement could see support tested at the 21-DMA and then 146.825. Support then comes in at 145.225.
Boxed beef cutouts were lower as choice cutouts decreased 1.29 to 246.07 and select declined 0.86 to 216.13. The choice/ select spread narrowed and is at 29.94 and the load count was 133.
Friday’s estimated slaughter is 118,000, which is above last week’s 115,000 and last year’s 114,000. Saturday slaughter is expected to be 36,000, which is below last week’s 42,000 and last year’s 58,000. The estimated total for the week (so far) is 664,000, which is even with last week and above last year’s 657,000.
The USDA report LM_Ct131 states: Thus far for Friday negotiated cash trading has been limited on light demand in all major feeding regions. Not enough purchases in any region for a market trend. The last reported market trend in any region was on Thursday. In the Southern Plains live purchases traded at 144.00. In Nebraska live and dressed purchases traded from 146.00-148.00 and at 230.00, respectively. In the Western Cornbelt, live and dressed purchases traded from 146.00-148.00 and at 230.00, respectively.
The USDA is indicating cash trades for live cattle from 143.00 – 149.00 and 227.00 – 233.00 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, October 13, 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
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