Livestock Report

Ben DiCostanzoGeneral Commentary

Walsh Trading Daily Insights

January Feeder Cattle gap opened lower and made the session low at 179.225. The low is just above support at the rising 100-DMA at 179.05. Bulls came in and bought futures, driving them higher the rest of the session to the high at 181.50. It settled nearby at 181.25. The bearish patterns didn’t stop the bullish players and they created an opposing pattern called a Piercing candlestick pattern. These patterns are more important when you are in a downtrend or an uptrend. But, in this case it illustrates the determination of bullish players to try to change the narrative from the previous day’s potential topping action. The cash index has bounced off its low is giving encouragement to the bulls. The bearish patterns are still in place however, as it will take a new high to cancel them. Price rallied past resistance at 180.80 and it settled above it. Settlement also overtook the declining 50-DMA now at 180.60. A failure from settlement could see price re-test support at the declining 50-DMA and revisit the rising 100-DMA. Support then comes in at 178.95. Continuation to the upside could re-test the previous 2 trading high at 182.375. 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 174.96 as of 10/25/2022.

December Live Cattle opened lower and traded to the session low at 152.825, dipping below support at 153.025 where bulls took over and took price higher the rest of the session, making the high at 153.675. Settlement was nearby at 153.575. Cash trade has yet to get going with some light trades taking place from 151.00 – 152.00 with Packers, in my opinion trying to create uncertainty for producers after last weeks heavy purchases.  Slaughter continues to be heavy, so with the week nearing its end, something has to give, so stay tuned! A break down below the low could see support tested at the rising 8-DMA now at 151.925. Support then comes in at 151.75.  Short-Term moving averages are flowing higher and could provide support on any further pullback in Cattle. If settlement holds, price could re-test the high at 154.25 and then move toward resistance at 156.30. Resistance then comes in at 157.25.

Boxed beef cutouts were mixed as choice cutouts dipped 0.57 to 260.86 and select increased 1.25 to 228.60. The choice/ select spread narrowed and is at 32.26 and the load count was 150.

Wednesday’s estimated slaughter is 129,000, which is above last week’s 127,000 and last year’s 122,000. The estimated total for the week (so far) is 384,000, which is above last week’s 381,000 and last year’s 366,000.

The USDA report LM_Ct131 states: So far for Wednesday 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 – 152.00 and at 236.00 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 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.

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**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


Fax: 312.256.0109

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