Cattle Markets Pull Back after Friday's All-Time Highs
October Feeder Cattle saw routine profit taking turn into a rout as price broke down over 4 handles from Friday’s high. The breakdown took price from the new contract high made on Friday back into its trading range established from September 11th to September 14th. The Monday high came in at 264.375 and the low at 260.225. It settled at 260.95. The breakdown tested support at the rising 8-DMA now at 260.90. It broke Through support and settled just above it. The 8-DMA held as support the past couple times it was tested and Monday was no different. If price can hold settlement, we could test resistance at 262.075. If price continues from here, we could revisit the all-time high at 264.675. A failure from settlement could see a test of support at the rising 13-DMA now at 258.725. Support then comes in at 257.925.
The Feeder Cattle Index decreased and is at 252.75 as of 9/15/2023.
December Live Cattle saw some routine profit taking as it traded lower from Friday’s new all-time high. It made its high at191.90 and the low at 190.725. Settlement was at 191.00. It formed an inside candlestick indicating some indecision as we are at all-time highs and are close to the psychological 200.00 level. Consolidation was in order, in my opinion, as the cash market will probably not trade until late in the week and December is well above the cash market. Last week’s average came in at 183.84, up from the previous week’s 182.28 (so far). We have the Cattle on Feed report on Friday and with futures well above cash, we may linger in this area until we get a better idea on what packers are doing in the cash market. Cutouts remain weak and packers don’t like losing money, in my opinion. Supplies remain tight and are expected to tighten even more going forward, but December is high compared to cash. We’ll see…. A rally past the Monday high could see price test the all-time high at 192.00. R2 pivot resistance is nearby at 192.40 and R3 is at 192.90. Weekly R1 is at 195.025. A breakdown from the low could see the Friday low revisited at 190.075. Pivot support at S3 is next at 189.375.
Boxed beef cutouts were mixed as choice cutouts decreased 0.39 to 305.32 and select increased 0.29 to 283.41. The choice/ select spread narrowed and is at 21.91 and the load count was 113.
Monday’s estimated slaughter is 121,000, which is below last weeks and last year’s 125,000.
The USDA report LM_Ct131 states: Thus far for Monday in the Southern Plains and Nebraska negotiated cash trade has been at a standstill. In the Western Cornbelt negotiated cash trade is mostly inactive on light demand. The most recent market trend in any region was last week. In the Southern Plains live FOB purchases traded from 182.00-183.00. Last week in Nebraska live FOB purchases traded from 184.00-185.00, with dressed delivered purchases trading at 292.00. In the Western Cornbelt live FOB purchases traded at 185.00, dressed delivered purchases traded at 292.00.
The USDA is indicating no cash trades for live cattle and 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, September 21, 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.**
Senior Market Strategist
Walsh Trading, Inc.
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
tested support at the
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.
On the date of publication, Ben DiCostanzo did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.