Walsh Trading Daily Insights
Commentary
March Feeder Cattle has taken over as the lead contract as its volume has exceeded the January contract. On the continuous chart the March contract moved past resistance at 184.375, making the high at 185.325 and settling at 185.025. The low came in at 182.875. If settlement fails, we could test support at the 184.375 and then 182.70. If settlement holds, we could test resistance at 185.80. Resistance then comes in at 187.20.
The Feeder Cattle Index decreased and is at 178.01 as of 12/19/2022.
February Live Cattle drifted lower in holiday type trade as the cash market remains untapped. The range came in at 156.00 for the high and 155.125 for the low. Settlement was at 155.575. Slaughter picked up on Tuesday after Monday’s huge decline but it still is below the recent norm. Packers will continue to pull back on slaughter to try to keep control of the retail and producer markets. Lower cattle numbers are here, packers aren’t making money, so they need to throw some uppercuts and round houses to keep everyone in line, in my opinion. It’s all about them after all….. Trade is expected to begin on Wednesday in the cash market, and steady prices for the week are expected. The cattle on Feed report is on Friday, so expect futures to continue to drift, in my opinion. If settlement holds, we could test resistance at 156.30. Resistance then comes in at 157.25. A failure from settlement could see price test support at 155.10.
Boxed beef cutouts were mixed as choice cutouts increased 1.22 to 265.05 and select collapsed 4.67 to 233.90. The choice/ select spread widened and is at 31.15 and the load count was 107.
Tuesday’s estimated slaughter is 124,000, which is above last week’s 121,000 and last year’s 120,000. The estimated total for the week (so far) is 224,000, which is below last week’s 246,000 and last year’s 241,000.
The USDA report LM_Ct131 states: So far for Tuesday in the Southern and Northern Plains negotiated cash trading 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 155.00. For the prior week in Nebraska and Western Cornbelt live and dressed purchases traded from 155.00-157.00 and at 248.00, respectively. In Colorado the last fully reported market was two weeks ago with live purchases 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 22, 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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