Walsh Trading Daily Insights
Commentary
January Feeder Cattle continued its consolidation, staying within Friday’s candle as corn weakness did little to help support Feeder Cattle. Tuesday’s range was 180.225 high to 178.925 low. Settlement was at 179.90. Price has traded in a narrow range for the past 5 sessions, locked between resistance at 180.80 and support at 178.95. Moving averages (8, 13, 21, 0, 100 DMAs) are tightly wound, so in my opinion a breakout above resistance or below support could lead to the next directional move. The WASDE report comes out on Wednesday and could give corn some direction. A failure from support could see price test support at the October 31 low at 177.70. Support then comes in at 175.70. If the Monday high is taken out, a test of resistance at 180.80 is likely. A break out above here could see price move towards resistance at 182.70.
The Feeder Cattle Index decreased and is at 176.59 as of 11/07/2022.
December Live Cattle matched Monday’s high at 153.25 and made the low at 152.60. It settled at the same price as Monday at 153.05. In other words, a dull quiet trading session as traders stayed away from eating meat as they watched the election news plastered over their television sets. Maybe they were eating chips and dip because it looked like they had no interest in Cattle. Cash was dead in the water as packers and producers were far apart with their pricing. Trade should start in earnest on Wednesday. Slaughter resumed its upward swing as it is estimated at 129,000 after yesterday’s drop off. If price can hold settlement, we could move towards resistance at 156.30. Resistance then comes in at 157.25. A breakdown below 153.025 could see support tested at the flattening 8-DMA now at 152.325. Support then comes in at 151.75.
Boxed beef cutouts inched higher as choice cutouts increased 0.39 to 264.94 and select ticked higher 0.13 to 236.05. The choice/ select spread widened and is at 28.89 and the load count was 151.
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 252,000, which is below last week’s 256,000 and above last year’s 244,000.
The USDA report LM_Ct131 states: So far for Tuesday negotiated cash trading has been at a standstill in the Southern Plains and Nebraska. In the Western Cornbelt negotiated cash trading has been limited on light demand. Not enough purchases for a market trend. Last week in the Texas Panhandle live purchases traded from 149.00-150.00. For the prior week in Kansas live purchases traded at 150.00. For the previous week in Nebraska live and dressed purchases traded at 153.00 and 242.00, respectively. Last week in the Western Cornbelt live and dressed purchases traded at 153.00 and from 240.00-242.00, respectively.
The USDA is indicating cash trades for live cattle at 150.00 and at 240.00 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, November 10, 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
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