Walsh Trading Daily Insights
Commentary
May Feeder Cattle consolidated in the upper end of Monday’s trading range with a negative lean as it closed lower on the session. The high came in at 201.75, the low was at 200.45 and it settled at 200.80. Price basically stayed within the support/ resistance area from 202.10 to 200.75. It settled just above support so in my opinion we need to hold the line here. A breakdown below support could see price work its way down to support at 197.975. If price can hold settlement, we could revisit resistance. A rally past here could send price on its way to test resistance at 205.15.
The Feeder Cattle Index surged and is at 191.24 as of 03/24/2023.
June Live Cattle also consolidated in the upper end of the Monday trading range. Its high was at 159.00, its low at 158.40 and its settlement was at 158.90. Talk about narrow trading ranges. It’s as if they forgot to turn the machines on except for a heartbeat. Sleepy day…. To me, it was expected to be a quiet session but once again .6 tick trading range… come on… Packers were hoping for a crash, producers were hoping for a continuation higher … so … no one was happy. Packers didn’t trade any cash yesterday and so far today as they don’t want to buy into this rally. Producers are pay up baby… pay up… so we all sit with hands in pockets and wait. This is a narrow range day 4 and day 7, so maybe we’ll get some movement on Wednesday. Cutouts have found its footing and are expected to grind higher as we move into April and May. We have a tight supply of cattle and retailers are chomping at the bit ready for grilling season, in my opinion. Packers have orders to fill but will try to wait out the producer and buy cattle towards the end of the week. In my opinion, the ball is in the producers’ court and packers will need to get after it. Price is stuck at the confluence of resistance on my continuous chart at the rising 100-DMA now at 158.90, the declining 13-DMA now at 158.775 and 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 from the Monday low at 156.95 and the Friday high at 156.85.
Boxed beef cutouts were higher as choice cutouts increased 0.27 to 280.63 and select increased 0.64 to 270.36. The choice/ select spread narrowed and is at 10.27 and the load count was 103.
Tuesday’s estimated slaughter is 127,000, which is even with last week and above last year’s 125,000. The estimated total for the week (so far) is 252,000, which is even with last week and above last year’s245,000.
The USDA report LM_Ct131 states: So far for Tuesday 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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