Walsh Trading Daily Insights
Commentary
August Feeder Cattle stayed in neutral, making the high at 230.05 and the low at 228.675. It settled at 229.50. It poked its nose above resistance at 229.825 and settled just below it, staying in the upper end of its 3-Day trading range of 230.275 – 227.725. So far, it has been able to maintain its price levels as the Feeder Index and the May and deferred futures contracts declined. If August can sustain a rally past 229.825, a test of resistance at 231.175 is possible. Resistance then comes in at 233.10. If price fails to hold settlement, we could test support at 227.80. Support then comes in at 226.925.
The Feeder Cattle Index decreased and is at 201.26 as of 04/24/2023.
June Live Cattle consolidated within Monday’s trading range forming an inside candlestick. The Tuesday range was 164.55 to 163.675. Settlement came in at 164.025. Futures are in a holding pattern as traders’ wait for cash to develop and see if packers can take prices down a notch or two or if producers can keep prices steady to higher. The light trading that took place on Tuesday is not encouraging for producers, in my opinion. The high was below resistance at 164.90. A break out above 164.90 could send price up to resistance at 166.975. A breakdown from settlement could see support re-tested at 162.725.
Cold Storage – Total red meat supplies in freezers were down 1 percent from the previous month and down 1 percent from last year. Total pounds of beef in freezers were down 4 percent from the previous month and down 10 percent from last year. Frozen pork supplies were up 2 percent from the previous month and up 10 percent from last year. Stocks of pork bellies were up 8 percent from last month and up 35 percent from last year.
Boxed beef cutouts were mixed as choice cutouts increased 0.51 to 307.63 and select decreased 1.08 to 287.62. The choice/ select spread widened and is at 20.01 and the load count was 141.
Tuesday’s estimated slaughter is 128,000, which is even with last week and above last year’s 126,000. The estimated total for the week (so far) is 252,000, which is above last week’s 249,000 and last year’s 250,000.
The USDA report LM_Ct131 states: So far for Tuesday in the Southern Plains and Nebraska negotiated cash trading has been at a standstill. In the Western Cornbelt negotiated cash trading has been mostly inactive with very light demand. Not enough purchases for a market trend. The most recent reported market was last week in all regions. In the Texas Panhandle live purchases traded at 175.00. In Kansas live purchases traded from 173.00-175.00. In Nebraska live and dressed purchases traded from 180.00-185.00 and from 284.00-290.00, respectively. In the Western Cornbelt live and dressed purchases traded from 180.00-183.00 and at 288.00, respectively.
The USDA is indicating cash trades for live cattle from 172.50 – 180.00 and at 275.00 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, April 27, 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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