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January Feeder Cattle opened lower and rallied to the session high at 243.425.It turned lower and broke down to the session low at 241.325. It drifted higher into the close to settle in the middle of the range at 242.425.    The price action was inside the range of Friday’s trade forming an inside candlestick, with a Doji. This indicates indecision in the market. The lower open saw price below the 50-DMA now at 243.025 and the rally stalled just above it. The breakdown took price below support at 242.475 and settlement was just below it giving the edge to bearish traders in my opinion. Traders liquidated some positions in front of the election, lightening their load as uncertainty crept in the markets. The cash index is near its recent highs so, futures are still trading at a steep discount to the index. Producers are nervous that the index will be making its way lower and there is a large fund long position in the market, in my opinion. If price holds settlement, it could re-test resistance at the 50-DMA and then the nearby declining 8-DMA now at 243.875. Resistance then comes in at the 13-DMA now at 244.30. A breakdown from settlement could see a test of support at 240.875.

The Feeder Cattle Index ticked higher and is at 251.00 as of 11/01/2024. 

December Live Cattle opened lower, made the high at 186.05 and then broke down to the session low at 184.575. It limped higher to settle near the low at 185.075. It was a disappointing session for bullish traders as the market was unable to capitalize on Friday’s strong bounce after making the weekly low. The price action formed an inside candlestick, trading down to the lower end of Friday’s range and bears, in my opinion had the advantage with the lower close and it was near the Friday low. Cutout strength didn’t help as Crude Oil had a strong rally and with the election jitters, traders took some off the top, negating some of the positive sentiment from  Friday’s trade. The fact that cash was a touch lower last week didn’t help sentiment. The packer pulling back on slaughter last week on the weaker cutout has trader’s thinking they will pull back on slaughter even more this week in an effort to drive cutouts higher and cash lower. With funds holding the largest net long position since the end of September 2023 any negative news could see a stronger pullback in my opinion. We’ll see!... If price can’t hold settlement, it could test support at 184.35. Support then comes in at the rising 100-DMA now at 183.10. If settlement holds, we could see price test resistance at 185.75. 

Boxed beef cutouts were higher as choice cutouts increased 0.57 to 316.91 and select jumped 2.13 to 287.16. The choice/ select spread narrowed and is at 29.75 and the load count was 103.

Monday’s estimated slaughter is 120,000, which is below last week’s 121,000 and last year’s 122,687.

The USDA report LM_Ct131 states:  So far for Monday, negotiated cash trading has been at a standstill in all regions. Last week in the Southern Plains live FOB purchases traded at 190.00. For the previous week in Nebraska and the Western Cornbelt, live FOB and dressed delivered purchases traded at 190.00 and from 296.00- 298.00, respectively.

The USDA is indicating no cash trades for live cattle and 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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