Walsh Trading Daily Insights
Commentary
April Feeder Cattle broke out above resistance at 195.40 early in the trading session. It raced to the session high at 196.825 and then collapsed, trading down to the low at 193.20 and settling near low at 193.85. The breakdown took price to just above support at 193.00 and it held for the day. The rally and then pullback keeps price locked into the 195.40 and 193.00 resistance and support levels. With a new high made and the index far below the futures, while corn was fighting and stalling its decline, traders felt the need to take profits. Once the sellers started, it was the fear of missing out and presto, a trade down to support. Feeders need to hold support at 193.00 in my opinion or price could test the 190.60 support level. If Feeders can hold settlement, price could revisit resistance at 195.40. The Wednesday high would be the next level to test.
The Feeder Cattle Index increased and is at 183.04 as of 02/28/2023.
April Live Cattle continued its consolidation within Friday’s trading range, rallying early to the high at 166.10 and then unable to press on, fell back and quickly traded to the low at 164.50. It bounced back and settled in the middle of the range at 165.125. Traders are waiting on cash and cash isn’t expected to gather steam until the end of the week. It looks like the USDA wasn’t able to publish its mandatory reports, well at least I couldn’t get it to update. So, I don’t know if any cash trades took place today. Futures are leaning on support at 164.90 and must maintain this level or we could see a breakdown to support at 162.75. So far, it is holding the line settling above it after falling below support. Resistance remains at 166.975. Exports are out before the Thursday open.
Boxed beef cutouts were lower as choice cutouts decreased 1.12 to 287.83 and select was dropped 2.82 to 276.43. The choice/ select spread widened and is at 11.40 and the load count was 100.
Wednesday’s estimated slaughter is 126,000, which is even with last week and above last year’s 124,000. The estimated total for the week (so far) is 376,000, which is above last week’s 357,000 and even with last year.
The USDA report LM_Ct131 states: This report hasn’t updated so here’s a Tuesday repeat: So far for Tuesday negotiated cash trading has been a standstill in the Southern Plains and Nebraska. In the Western Cornbelt negotiated cash trading has been limited on very light demand. In the Western Cornbelt, a few live purchases traded at 165.00. However, not enough purchases for a full market trend. For the previous week in these regions live purchases traded mostly at 164.00. Last week in Nebraska dressed purchases traded at 262.00. For the prior week in the Western Cornbelt dressed purchases traded from 260.00-262.00.
The USDA is indicating cash trades for live cattle at 165.00 and nothing 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, March 02, 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
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