Walsh Trading Daily Insights
Commentary
March Feeder Cattle continued lower on Friday, breaking down to the session low at 185.05 and nearly erasing the Wednesday rally in the process. The Wednesday low was at 184.875. The Friday low was also just above support at the rising 21-DMA now at 184.90. The last two sessions were inside the Wednesday candle as its surge took it too far above the Feeder Cattle Index and the snap back to reality took futures closer to the index. Friday’s high was at 186.85 and settlement came in at 185.65. Settlement was below support at 185.80 and if price falls below the rising 21-DMA, we could test support at 184.375 and then move towards support at 182.70. If Feeders can overtake 185.80, we could test resistance at 187.20. Resistance then comes in at 188.95.
The Feeder Cattle Index increased and is at 180.46 as of 01/05/2023.
February Live Cattle couldn’t get it going on Friday, trading tot the high early at 157.475 and heading down to the low at 156.60. It settled at 156.775. The low was just above support at the rising 21-DMA now at 156.50 and key level at 156.30. The high was just above the key level at 157.25. It was a quiet Friday session as bulls can’t get anything going. Cash, however, traded as high as 160.50 as packers were forced to move to higher levels. This bodes well going forward and has producers thinking sugar plums are coming their way, in my opinion. If settlement holds, we could test resistance at 157.25. A rally past the Wednesday high (158.15) could see price move towards resistance at 159.075. A failure from 156.30 could see price test support at 155.10. Support then comes in at 153.025.
Boxed beef cutouts were higher as choice cutouts increased 1.36 to 282.99 and select increased 2.39 to 259.34. The choice/ select spread narrowed and is at 23.65 and the load count was 108.
Friday’s estimated slaughter is 125,000, which is above last week’s 122,000 and last year’s 111,000. Saturday slaughter is expected to be 53,000, which is above last week’s 37,000 and below last year’s 60,000. The estimated total for the week (so far) is 563,000, which is above last week’s 547,000 and below last year’s 619,000.
The USDA report LM_Ct131 states: Thus far for Friday in Nebraska negotiated cash trading has been slow on light demand. Compared to last week live purchases traded 1.00 lower at 157.00, on a light test. A few dressed purchases traded steady with the last reported market on Thursday at 252.00. In the Western Cornbelt negotiated cash trading has been light on light demand. In the Southern Plains negotiated cash trading has been mostly inactive on very light demand Not enough purchases in these three regions for a full market trend. In the Southern Plains on Thursday live purchases traded at 157.00. In the Western Cornbelt on Thursday live and dressed purchases traded from 158.00-160.00 and at 252.00, respectively.
The USDA is indicating cash trades for live cattle from 153.00 – 160.50 and from 248.00 – 254.00 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, January 12, 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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