Live Cattle
The April Live Cattle retraced most of Thursday’s losses on Friday January 28, 2018. It traded past resistance at 124.70 but ended the session just slightly below at 124.60. This will be the key to trade on Monday, in my opinion. Trading above here could lead to a test of resistance at 125.50. Continuing from here could see a retest of the Thursday high at 126.30. Resistance then comes in at 127.15. A failure from 124.70 could lead to a test of support at 123.125. A failure from the here could see a test of trendline support at 122.625. The negotiated cash trade was active on Friday with live sales at 127.00 and dressed at 200.00. Friday afternoon boxed beef cutout values were higher on Choice and Select on moderate demand and light offerings. Choice was up 0.06 to 206.83 and Select was up 0.51 to 201.83 on 82 loads. The choice/ select spread narrowed to 5.00. The estimated cattle slaughter for Friday was reported at 107,000. The Cattle on Feed report was released on Friday after the close of trading. U.S. CATTLE ON FEED ESTIMATES
IN YARDS WITH MORE THAN 1,000 CAPACITY
AVERAGE RANGE
ACTUAL OF ESTIMATES OF ESTIMATES
CATTLE ON FEED January 108 107.7 107.2-108.9
PLACED DURING December 101 96.9 93.3-104.0
MARKETED DURING December 99 98.6 93.6-103.5
The report is bearish as once again placements came in higher than expected. Down the road there will be a lot of cattle coming to market. Right now, packers need cattle and after the report came out they paid up for cattle. Weights are down due to the severe weather in certain parts of the country. Near term supplies are tight. Demand has been excellent as exports for January were at record highs. Cattle will remain volatile and if past trading after a Cattle On Feed report is repeated, you could see an early breakdown in price before another leg higher.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, February 3, at 3:00pm. 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
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.