Walsh Trading Daily Insights
Commentary
May Feeder Cattle is now the lead contract as its volume has exceeded the volume of the April contract. Feeders surged on Monday, trading up to 201.775 for the session high, approaching resistance at 202.10 and then easing into the close to settle at 201.375. It had opened higher, down -ticking to the low at 198.05before the rally. A strong end to the week for the fats on Friday and a strong feeder cattle cash market led to the rally in my opinion. The Feeder Index, (released after the close) confirmed what the talk was as the index jumped over 2 bucks. Settlement was strong, as it was above resistance at 200.75and keeps 202.10 resistance in traders sights. Resistance then comes in at 205.15. A failure from 200.75 could see price test support at 197.975.
The Feeder Cattle Index surged and is at 191.24 as of 03/24/2023.
June Live Cattle gap opened higher, down-ticked to try and close the gap and then surged. It kept going up all session with no significant pullbacks and made the high at the end of the session at 158.925 and settled just under the high at 158.875. The low was at 156.95, leaving a small gap from the Friday high at 156.85 to the Monday low. A strong end to week for cash sales on Friday, along with a calming down in outside markets as the banking system survived the weekend without any new problems, helped ignite cattle. There is anticipation for cash to at worst stay steady to higher prices for this week. We are ever closer to grilling season and at least for now traders are expecting better cash prices down the road, even with the seasonal tendencies for an uptick in cattle. The rally took price just past resistance on my continuous chart at the rising 100-DMA now at 158.825 and just below resistance at 159.075. If price can hold settlement, we could test resistance at 159.075. Resistance then comes in at 160.75. A breakdown from the 100-DMA could see price test support at 157.25, then the gap.
Boxed beef cutouts were higher as choice cutouts increased 0.48 to 280.36 and select increased 0.97 to 269.72. The choice/ select spread narrowed and is at 10.64 and the load count was 71.
Monday’s estimated slaughter is 125,000, which is even with last week and above last year’s 120,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at a standstill in all regions. In all regions the latest established market was last week. In the Southern Plains live purchases traded at 163.00. In Nebraska live and dressed purchases traded from 164.00-165.00 and dressed at 265.00, respectively. In the Western Cornbelt live and dressed purchases traded from 165.00-166.00 and at 265.00, 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, March 30, 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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