Cattle futures broke down hard as Cattle on Feed estimates shook the market with the realization that the “on feed” numbers are expected to remain elevated for the near future. This continues to keep the pricing power in the packers’ hands as cash cattle traded at 173.00 on a dressed basis and 109.00-109.50 for live cattle. It wasn’t a large number traded but reflects the nervousness producers are feeling as they work their way through the supply. Packers are comfortably making a killing as boxed beef prices remain strong with choice climbing 0.47 to 214.04 and select dipping 0.11 to 203.97, widening the spread to 10.07. October Live Cattle futures gap opened lower and traded just past support at 108.65 to the low at 108.30. It settled just above it at 108.90. More selling pressure could see price testing support at 107.35. Feeder Cattle also gap opened lower on its way past support at 148.40 to its low at 147.875. IT also was able to close above its support level, settling at 148.625. If it continues lower, it could press support at 147.35 and then the 100 (146.50) and 200 (146.45) DMA’s should provide strong support.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 23rd 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,
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.