Walsh Trading Daily Insights
January Feeder Cattle broke down hard on Tuesday, taking out Monday’s low and erasing most of Friday’s gains in the process. Today’s trade created two potential bearish technical patterns. The high on Tuesday matched Monday’s high at 182.375. This is potentially a Tweezer Top formation. We also had a potential Bearish Engulfing candle as Tuesday’s open was above Monday’s close and the close was below Monday’s close. Settlement came in at 180.25 and is below the 50-DMA at 180.875 and resistance at 180.80. More bearish developments. The low was at 179.95. The high was just shy of resistance at 172.70. A failure from settlement could see price test support at the rising 100-DMA now at 178.975. Support then comes in at 178.95. If resistance at 182.70 is taken out we could see price move towards resistance at 184.375.
The Feeder Cattle Index increased and is at 174.85 as of 10/24/2022.
December Live Cattle made a new high for the up move at 154.25 and then pulled back, trading down to the low at 153.15. It settled near the low at 153.15. Cash has been quiet and the rally is extended so, traders pulled futures back as they nervously await any cash action. The low however, is still above the key level at 153.025 which is a positive for Cattle. A break down below 153.025 could see support tested at 151.75. Support then comes in at the rising 8-DMA now at 151.20. Short-Term moving averages are flowing higher and could provide support on a further pullback in Cattle. If settlement holds, price could re-test the high and then move toward resistance at 156.30. Resistance then comes in at 157.25.
Boxed beef cutouts were higher as choice cutouts surged 3.51 to 261.43 and select increased 1.74to 227.35. The choice/ select spread widened and is at 34.08 and the load count was 149.
Tuesday’s estimated slaughter is 129,000, which is above last week’s 128,000 and last year’s 124,000. The estimated total for the week (so far) is 255,000, which is above last week’s 254,000 and last year’s 244,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading in the Southern Plains and Nebraska has been at a standstill. In the Western Cornbelt negotiated cash trading has been mostly inactive on very light demand. Not enough purchases for a market trend. Last week in the Southern Plains live purchases traded at 148.00. For the prior week in Nebraska live and dressed purchases traded from 150.00- 152.00 and at 236.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded at 150.00 and from 232.00-236.00, respectively.
The USDA is indicating cash trades for live cattle at 151.00 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 27, 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.
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