Walsh Trading Daily Insights
Commentary
March Feeder Cattle continued its consolidation on Wednesday, revolving around the 187.20 key level, making the high at 187.925 and the low at 186.25. It settled above it at 187.325. Feeder Cattle is in a trading range with the high at 188.575 and the low at 185.55. Feeders couldn’t gain any traction even with corn and the rest of the ag markets in negative territory. The fats are also consolidating and are waiting on the cash market, so Feeders look like they don’t want to get ahead of itself. The low was just above the rising 13-DMA now at 186.15 which gives positive vibes for Feeders going forward. 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 revisit the 13-DMA and then support at 185.80. Support then comes in at the rising 50-DMA now at 184.675.
The Feeder Cattle Index ticked up and is at 183.07 as of 02/14/2023.
April Live Cattle continued its consolidation of Monday’s gains, making its high at 165.10 and low at 163.975. It settled at 164.60. The high was just above the key level at 164.90 and the low just above the rising 13-DMA now at 163.85. Settlement was below the key level. Cash has traded lightly so far this week with the range from 157.00 to 162.00 and 254.00 on a dressed basis. The 162.00 trade is a new high which shows packers are reaching for cattle early, in my opinion, and we could see packers remain aggressive as cutouts are moving higher. Slaughter is now expected to be closer to last week’s number as packers continue to lower the kill. If futures can overtake resistance at 164.90, we could move towards resistance at 166.975. A failure below the low could see price re-test support at the 13-DMA. Support then comes in at 162.725.
Boxed beef cutouts were higher as choice cutouts surged 3.61 to 275.67 and select jumped 2.41 to 261.19. The choice/ select spread widened and is at 14.48 and the load count was 101.
Wednesday’s estimated slaughter is 125,000, which is above last weeks and last year’s 124,000. The estimated total for the week (so far) is 376,000, which is above last week’s 370,000 and last year’s 372,000.
The USDA report LM_Ct131 states: Thus far for Wednesday negotiated cash trading in Nebraska and Western Cornbelt has been limited on light demand. In Nebraska a few live purchases traded at 159.00. In the Western Cornbelt a few live purchases traded at 162.00. Not enough live or dressed purchases for a full market trend in either region. Last week in Nebraska live and dressed purchases traded from 157.00-160.00 and at 254.00, respectively. For the prior week in the Western Cornbelt live and dressed purchases traded at 160.00 and at 254.00, respectively. In the Southern Plains negotiated cash trading was at a standstill. Last week in the Texas Panhandle live purchases traded at 160.00. For the previous week in Kansas live purchases traded from 160.00-161.00.
The USDA is indicating cash trades for live cattle from 157.00 – 162.00 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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