Walsh Trading Daily Insights
Commentary
January Feeder Cattle consolidated within Tuesday’s trading range, forming an inside candlestick on Wednesday. It made the high early in the session at 182.25 and soon after the low at 180.75. The low was right on the 100-DMA at 189.75. It consolidated the rest of the session and settled near the low at 180.90. Corn trickled higher and the Feeder Cattle Index has rebounded off its recent low. If settlement holds, we could test resistance at 182.70 and then move towards the Monday high at 184.20. If settlement fails, we could test the 21-DMA, now at 180.075. Support then comes in at 178.95.
The Feeder Cattle Index increased and is at 179.02 as of 12/06/2022.
February Live Cattle traded down and tested support at 153.075 early in the trading session, making the low at 152.75 and then reversing course and rallying to the high at 153.90. It drifted the rest of the session and settled at 153.55. Strong cutouts weren’t enough to drive cattle prices higher as packers seemed to have been able to take advantage of the futures breakdown to get cash prices moving lower. The session however, formed a Doji candlestick, which, if price can open stronger could lead to a recovery rally on Thursday. Exports are out before the open so hopefully with a weaker Dollar, we see strong export sales and a positive day in the futures. If settlement fails, we could re-test support at 153.075 and then the rising 50-DMA now at 152.00. A rally above the Wednesday high, could lead to a test of resistance at the 21-DMA at 154.50. Resistance then comes in at 155.10.
Boxed beef cutouts were higher as choice cutouts surged 6.31 to 248.96 and select rose 0.63 to 219.77. The choice/ select spread widened and is at 29.19 and the load count was 174.
Wednesday’s estimated slaughter is 127,000, which is below last week’s 128,000 and above last year’s 120,000. The estimated total for the week (so far) is 382,000, which is below last week’s 384,000 and above last year’s 365,000.
The USDA report LM_Ct131 states: So far for Wednesday negotiated cash trading in Nebraska has been slow on light to moderate demand with live purchases 1.00 lower compared to last week at 156.00 and dressed purchases 1.00 to 2.00 lower compared to last week at 247.00. In the Southern Plains, Western Cornbelt, and Colorado negotiated cash trading has been limited on light demand. Not enough purchases in these regions for a market trend. Last week in the Southern Plains live purchases traded at 155.00. 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 live purchases traded at 157.00.
The USDA is indicating cash trades for live cattle from 153.00 – 156.00 and from 245.00 – 247.00 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, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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