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January Feeder Cattle gap opened lower at the high of the day at 243.25. It crashed from here, trading down to the low at 240.275. It settled in and consolidated the rest of the session near the low, settling at 241.425. The breakdown took price below support at 242.475 and 240.875 with settlement in between the two support levels. The breakdown couldn’t take out the November 1 st low at 239.50 giving hope to bullish traders. The
Feeder index has moved off its recent highs but isn’t crashing. Traders seem to believe that the has peaked and will head towards the futures going forward. We’ll see!… If price holds settlement, it could test resistance at 242.475. Resistance then comes in at the 50-DMA now at 243.475. A breakdown from settlement could see a re- test of support at 240.875. The November 1 st low is next and then 238.35.
The Feeder Cattle Index down ticked and is at 249.86 as of 11/07/2024.
December Live Cattle gap opened lower, made the high at 184.825 and then broke down to the session low at 183.45. It recovered off the breakdown and traded back to the high before collapsing yet again to settle near the low at 183.70. Cash market weakness led by a breakdown in the cutout put the pressure on futures in my opinion. Since the choice peaking around 324.00, we have seen it fall around 16 handles. The packer continues
to keep slaughter under wraps as it is once again below last year and they have been able to get producers to relent on prices in the cash market as a result in my opinion. We are also seeing some demand concerns as we are entering turkey season and we usually see some pressure in the cattle markets during this time. Then we get the Christmas and holiday rush into the end of the year so, some volatility is coming in my opinion. Exports were weak on the latest report as prices were strong during this period. So, in my opinion, the packer has the producer in a tough position for now. The breakdown stopped just above trendline support at 183.40 and will rise to 183.50for Monday. This could make or break the trading session on Monday. If price can’t hold the trendline, it could test support at 182.575. Support then comes in at the rising 200-DMA now at 182.05. If settlement holds, we could see price test resistance at 184.35. Resistance then comes in at the gap close at 185.275.
Boxed beef cutouts were lower as choice cutouts decreased 1.53 to 307.93 and select decreased 0.53 to 279.19. The choice/ select spread narrowed and is at 28.74 and the load count was 151.
Friday’s estimated slaughter is 116,000, which is below last week’s 119,000 and above last year’s 112,505. Saturday slaughter is expected to be 9,000, which is above last week’s 6,000 and below last year’s 12,706. The estimated total for the week (so far) is 619,000, which is above last week’s 615,000 and below last year’s 622,952.
The USDA report LM_Ct131 states: Thus far for Friday in the Southern Plains negotiated cash trade has been light on light demand. Compared to last week, a few live FOB purchases have traded 3.00 lower at 187.00. In Nebraska negotiated cash trade has been light to moderate on moderate demand. Compared to last week, a few live FOB purchases traded 2.00-4.00 lower from 186.00-188.00. Not enough dressed purchases for a market trend. Last week dressed delivered purchases traded from 296.00-298.00. In the Western Cornbelt negotiated cash trade has been light on light demand. A few live FOB purchases traded from 185.00-186.00, however, not enough purchases live or dressed purchases for a market trend. Last week live FOB purchases traded at 190.00 and dressed delivered purchases traded from 296.00-298.00.
The USDA is indicating cash trades for live cattle from 184.00 – 189.00 and 290.00 –298.00 on a dressed basis (so far).
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
bdicostanzo@walshtrading.com
www.walshtrading.com
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