Walsh Trading Daily Insights
Commentary
March Feeder Cattle started 2023 on a sour note, making its high in the opening five minutes at 186.275 and sprinting to its low at 184.30 by 9:15 AM (CST). It drifted near the lows the rest of the session and settled at 184.775. With corn working its way lower all session, hope was in the air for a rally in Feeders, but alas it wasn’t to be…. It seemed the sentiment was sour throughout the commodity complex and most markets displayed weakness all day. Not the way you would want the new year to start. The breakdown took price to support at 184.375 and the rising 21-DMA now at 184.275. Support was able to contain the selling as it settled above these levels, that provides some hope going forward. We’ll see…. If settlement fails, we could test support at 182.70 and then the rising 50-DMA now at 181.675. If Feeders can hold settlement, we could test resistance at 185.80. Resistance then comes in at 187.20.
The Feeder Cattle Index decreased and is at 181.02 as of 01/022/2023.
February Live Cattle stumbled out of the 2023 starting gate, opening at the high at 158.15 and trading down to the session low at 156.65 by 10.25 AM (CST). The race was over, and price trotted around the track and settled near the low at 156.85. With the rally over the past few weeks, maybe it was time to see a little pullback in the fats. Cash didn’t trade on Tuesday, but it is expected to trade higher, especially as producers see those cutouts moving higher and they want some of that action as they feel they have some control with the lower cattle supplies, in my opinion. The breakdown took price below support at 157.25, but the selling wasn’t strong enough to challenge support at 156.30. If settlement holds, we could test resistance at 157.25 and then the rising 8-DMA now at 157.725. Resistance then comes in at 159.075. A failure from settlement could see price test support at 156.30. Support then comes in at 155.10.
Boxed beef cutouts were higher as choice cutouts surged 4.97 to 286.95 and select jumped 3.70 to 254.63. The choice/ select spread widened and is at 32.32 and the load count was 117.
Tuesday’s estimated slaughter is 126,000, which is below last week’s 128,000 and above last year’s 116,000. The estimated total for the week (so far) is 133,000, which is below last week’s 134,000 and last year’s 223,000.
The USDA report LM_Ct131 states: So far for Tuesday negotiated cash trading has been at standstill in the Southern Plains, Nebraska and Western Cornbelt. Last week in the Southern Plains live purchases traded at 157.00. For the prior week in Nebraska live and dressed purchases traded at 158.00 and 252.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded from 157.00-160.00 and from 250.00-252.00, respectively.
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, January 05, 2023 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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