Walsh Trading Daily Insights
Commentary
March Feeder Cattle pulled back into the lower end of Monday’s trading range, forming an inside candlestick. The Tuesday range was 187.225 to 186.125 and settlement was at 186.65. The market seemed tired after Monday’s wild session, with traders unwilling to press futures higher and keeping the price action stuck within resistance and support. Feeder Cattle is in a trading range with the high at 188.575 and the low at 185.55. If Feeders hold settlement, we could test resistance at the February 7th high (188.575) and then nearby resistance at 188.95. Resistance then comes in at 190.20. A failure from settlement could see price once again revisit the Monday low. Support then comes in at the rising 50-DMA now at 184.575.
The Feeder Cattle Index decreased and is at 183.06 as of 02/13/2023.
April Live Cattle consolidated Monday’s gains, opening lower and trading to the session high at the key level at 164.90. It broke down from the high and traded below the 8-DMA now at 164.15 to the low at 163.90. Bulls came back into the market, and it recovered and settled near the high at 164.675. The market paused as it has been doing, making a high and then pulling back, waiting for cash confirmation and then moving higher once again. Cash has traded early this week with the range from 157.00 to 160.00. This is basically within last week’s range as packers bought a lot of cattle last week and may not have to be aggressive this week as the slaughter levels are expected to stay around last week’s level (630,000), to maybe 640,000. If futures can overtake resistance at 164.90, we could move towards resistance at 166.975. A failure below the low could see price test support at the 13-DMA, now at 163.575. Support then comes in at 162.725.
Boxed beef cutouts were higher as choice cutouts increased 2.11 to 272.06 and select increased 2.57 to 258.78. The choice/ select spread narrowed and is at 13.28 and the load count was 113.
Tuesday’s estimated slaughter is 125,000, which is below last weeks and last year’s 126,000. The estimated total for the week (so far) is 251,000, which is above last week’s 246,000 and last year’s 248,000.
The USDA report LM_Ct131 states: So far for Tuesday negotiated cash trading has been at a standstill in Kansas and Nebraska. In the Texas Panhandle and Western Cornbelt negotiated cash trading has been mostly inactive on very light demand. Not enough purchases for a market trend. Last week was the latest established market in these regions. In the Texas Panhandle live purchases traded at 160.00. In Kansas live purchases traded from 160.00-161.00. In Nebraska live and dressed purchases traded from 157.00- 160.00 and at 254.00, respectively. In the Western Cornbelt live and dressed purchases traded at 160.00 and at 254.00, respectively.
The USDA is indicating cash trades for live cattle from 157.00 – 160.00 and at 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, February 16, 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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