Walsh Trading Daily Insights
Commentary
January Feeder Cattle made a new high for the up move, approaching resistance at 184.375 rallying to 184.20 for the Monday high. Settlement was at 183.775 and the low was at 181.95. Weakening corn is bringing feed cost relief for feeders and tightening supply forcing feedlots to be aggressive in order to ensure a fuller feedlot, in my opinion. A failure from settlement could see price test support at 182.70. Support then comes in at the rising 100-DMA now at 180.65. If settlement holds, we could test of resistance at 184.375. Resistance then comes in at 185.80.
The Feeder Cattle Index declined and is at 178.14 as of 12/02/2022.
February Live Cattle tested resistance at 156.30 on Monday, making the high just above it at 156.375. Resistance held and it pulled back, settling at 155.825. The low came in at 155.45. Traders couldn’t hold resistance as it nervously wats for show lists and bid/ offers from packers and producers. Expectations are for offers to be higher as producers look to gain control of the cash market as supplies tighten. Packers are expected to pull back on slaughter as cutouts are crashing and they want to remain in control of the cash market and keep cattle costs down as they are losing leverage in my opinion. They will look to push producers to hold cattle longer and put more weight on their cattle to keep production high as supply tightens. Resistance remains at 156.30 and if price can overtake this level, we could test resistance at 157.25. Resistance then comes in at 159.075. If settlement fails, we could see support tested at 155.10. Support then comes in at the rising 21-DMA now at 154.40.
Boxed beef cutouts crashed as choice cutouts collapsed 6.62 to 243.31 and select dropped 3.45 to 221.11. The choice/ select spread narrowed and is at 22.20and the load count was 132.
Monday’s estimated slaughter is 127,000, which is below last week’s 128,000 and above last year’s 121,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been mostly inactive on very light demand in Nebraska. Not enough purchases for a market trend. In the Southern Plains, Colorado and Western Cornbelt negotiated cash trading has been at a standstill. Last week in the Southern Plains live purchases traded at 155.00. In Nebraska for the prior week live and dressed purchases traded at 157.00 and from 248.00-249.00, respectively. In the Western Cornbelt for the previous week live and dressed purchases traded from 157.00-158.00 and at 249.00, respectively. In Colorado last week live purchases traded at 157.00.
The USDA is indicating no cash trades for live cattle and 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, December 08, 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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