Walsh Trading Daily Insights
Commentary
August Feeder Cattle made a new high on Friday, reaching 232.225 and then pulling back the rest of the session to the low at 230.225 and settling near the low at 230.725. There likely was some profit taking place as we came to the end of the week and especially the month. Settlement was below the key level at 231.175, which puts support at 229.825 as the next line of defense for the bulls. A failure below here could see support tested at 228.05. If price can retake 231.175, it could revisit the Friday high. Resistance then comes in at 233.10.
The Feeder Cattle Index increased and is at 203.20 as of 04/27/2023.
June Live Cattle grinded higher, making the low at 164.925 and the high at 165.575. Settlement came in just below the high at 165.475. The low tested the key level at 164.90 and the high was a new high for the week. Cash prices were soft this week, as packers were able to take advantage of an outage at a packing plant to get producers to come to them on price. If a plant is down and we are already slowing slaughter, well we don’t need your cattle, but we will take them at this price. It’s looking like the average will be below last week’s average and with May right here, it is just about time for the seasonal increase in cattle ready to be processed which may put some pressure on price going forward. June is now the spot month and the lead contract, and with futures trading at a large discount to cash, packers are primed and hedged producers may pull cattle forward to take advantage of the basis. A continuation higher could send price up to test resistance at 166.975. Resistance then comes in at 168.625. A breakdown from settlement could see support re-tested at 164.90 and then the rising 21-DMA now at 163.575. Support then comes in at 162.725.
Boxed beef cutouts were mixed as choice cutouts increased 0.37 to 311.44 and select decreased 0.75 to 288.34. The choice/ select spread widened and is at 23.10 and the load count was 87.
Friday’s estimated slaughter is 106,000, which is below last week’s 108,000 and last year’s 117,000. Slaughter for Saturday is expected to be 18,000, which is above last year’s 12,000 and below last year’s 32,000. The estimated total for the week (so far) is 620,000, which is below last week’s 622,000 and last year’s 647,000.
The USDA report LM_Ct131 states: Thus far for Friday in the Southern Plains negotiated cash trading has been slow on light to moderate demand. In the Texas Panhandle, compared to last week, live purchases traded 2.00 lower at 173.00. In Kansas, compared to the prior week, live purchases traded steady to 2.00 lower at 173.00. A light test was noted in both regions. In Nebraska negotiated cash trading has been limited on light demand. A few live purchases traded steady at 178.00, when compared to the most recent reported market on Thursday. The last reported dressed purchase market was on Thursday from 283.00-286.00. In the Western Cornbelt negotiated cash trading has been mostly inactive with light demand. Not enough purchases for a market trend. The most recent reported market was on Wednesday with live and dressed purchases at 180.00 and at 285.00, respectively.
The USDA is indicating cash trades for live cattle from 171.00 – 181.00 and from 275.00 – 287.00 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, May 04, 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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