11/10/23
Wow, what a week… The Cattle markets and the Soybean markets were all over the place this week. Since the Feed on Cattle Report, on October 20th, the Cattle markets have gotten crushed. December’23 Live Cattle is down 10.45 or almost 6% since the report. Today the December’23 Live Cattle were 0.175 lower, and settled at 174.175, a loss of 9.700 or over 5% for the week. The low trade today at 173.150, is also the weekly and monthly low. January’24 Feeder Cattle actually had a gain today, up 1.500 and settled at 226.425, but dropped 13.325 for the week, a drop of almost 6%. Since the report, Feeders are down almost 8%, and the low today at 223.625 is the weekly and monthly low. December’23 Lean Hogs had a small gain today, up 0.450, and settled at 71.900, a tiny gain of 0.150 for the week. I have been Bearish Cattle for a while, and I think the Cattle market is going to head lower as a long-term view. That said, there could be a short-term bounce. My target prices were both hit in the December’23 Live Cattle @175 and January’24 Feeder Cattle @230. I believe this is the right environment to put on option trades or to hedge in the Cattle markets. Next year’s prices: June’24 Live Cattle 172.025, August’24 Feeder Cattle 247.650, August’24 Lean Hogs 95.925.
LIVE CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| DEC’23 174.175 | 180C | 0.600 | $240 |
| 185C | 0.175 | $70 | |
| 190C | 0.100 | $40 | |
| ATM 174C 2.550 | ATM STRADDLE 4.925 | EXPIRES 12/1/23 | |
| FEB’24 174.650 | 180C | 2.575 | $1,030 |
| 185C | 1.375 | $550 | |
| 190C | 0.725 | $290 | |
| ATM 175C 4.550 | ATM STRADDLE 9.425 | EXPIRES 2/2/24 | |
| APR’24 176.925 | 185C | 2.950 | $1,180 |
| 190C | 1.800 | $720 | |
| 195C | 1.100 | $440 | |
| ATM 177C 6.050 | ATM STRADDLE 12.175 | EXPIRES 4/5/24 |
LIVE CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| DEC’23 174.175 | 170P | 1.025 | $410 |
| 165P | 0.375 | $150 | |
| 160P | 0.150 | $60 | |
| ATM 174P 2.375 | ATM STRADDLE 4.925 | EXPIRES 12/1/23 | |
| FEB’24 174.650 | 170P | 2.775 | $1,110 |
| 165P | 1.475 | $590 | |
| 160P | 0.800 | $320 | |
| ATM 175P 4.875 | ATM STRADDLE 9.425 | EXPIRES 2/2/24 | |
| APR’24 176.925 | 170P | 3.275 | $1,310 |
| 165P | 2.000 | $800 | |
| 160P | 1.225 | $490 | |
| ATM 17P 6.125 | ATM STRADDLE 12.175 | EXPIRES 4/5/24 |
JUNE’24 LIVE CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 172.025 | 10% BULL MOVE | 189.227 | 188C | 1.975 |
| 172.025 | 10% BEAR MOVE | 154.822 | 150P | 1.125 |
| 172.025 | 20% BULL MOVE | 206.430 | 206C | 0.475 |
| 172.025 | 20% BEAR MOVE | 137.620 | 138P | 0.400 |
| 172.025 | 30% BULL MOVE | 223.632 | 222C | 0.175 |
| 172.025 | 30% BEAR MOVE | 120.417 | 112P | 0.100 |
FEEDER CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 226.425 | 235C | 2.850 | $1,425 |
| 240C | 1.750 | $875 | |
| 245C | 1.100 | $550 | |
| ATM 226C 6.325 | ATM STRADDLE 12.250 | EXPIRES 11/16/23 | |
| MAR’24 228.625 | 235C | 5.725 | $2,862.50 |
| 240C | 4.100 | $2,050 | |
| 245C | 2.900 | $1,450 | |
| ATM 229C 8.250 | ATM STRADDLE 16.875 | EXPIRES 1/25/24 | |
| APR’24 232.325 | 250C | 3.475 | $1,737.50 |
| 260C | 1.900 | $950 | |
| 270C | 1.075 | $537.50 | |
| ATM 232C 9.650 | ATM STRADDLE 18.975 | EXPIRES 3/28/24 |
FEEDER CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 226.425 | 220P | 3.475 | $1,737.50 |
| 215P | 2.150 | $1,075 | |
| 210P | 1.275 | $637.50 | |
| ATM 226P 5.925 | ATM STRADDLE 12.250 | EXPIRES 11/16/23 | |
| MAR’24 228.625 | 220P | 4.800 | $2,400 |
| 215P | 3.350 | $1,675 | |
| 210P | 2.300 | $1,150 | |
| ATM 229P 8.625 | ATM STRADDLE 16.875 | EXPIRES 1/25/24 | |
| APR’24 232.325 | 220P | 4.625 | $2,312.50 |
| 216P | 3.550 | $1,775 | |
| 206P | 1.775 | $887.50 | |
| ATM 232P 9.325 | ATM STRADDLE 18.975 | EXPIRES 3/28/24 |
AUGUST’24 FEEDER CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 247.650 | 10% BULL MOVE | 272.415 | 272C | 5.550 |
| 247.650 | 10% BEAR MOVE | 222.885 | 210P | 2.625 |
| 247.650 | 20% BULL MOVE | 297.180 | 296C | 2.100 |
| 247.650 | 20% BEAR MOVE | 198.120 | 184P | 0.775 |
| 247.650 | 30% BULL MOVE | 321.945 | 320C | 0.925 |
| 247.650 | 30% BEAR MOVE | 173.355 | 158P | 0.275 |
LEAN HOG CALLS
| MONTH | STRIKE | PRICE | COST |
| DEC’23 71.900 | 75C | 0.700 | $280 |
| 80C | 0.175 | $70 | |
| 85C | 0.050 | $20 | |
| ATM 72C 1.775 | ATM STRADDLE 3.650 | EXPIRES 12/14/23 | |
| FEB’24 75.575 | 80C | 1.700 | $680 |
| 85C | 0.700 | $280 | |
| 90C | 0.300 | $120 | |
| ATM 76C 3.250 | ATM STRADDLE 6.925 | EXPIRES 2/14/24 | |
| APR’24 81.525 | 85C | 3.475 | $1,390 |
| 90C | 1.925 | $770 | |
| 95C | 1.050 | $420 | |
| ATM 82C 4.800 | ATM STRADDLE 10.075 | EXPIRES 4/12/24 |
LEAN HOG PUTS
| MONTH | STRIKE | PRICE | COST |
| DEC’23 71.900 | 67P | 0.450 | $180 |
| 65P | 0.200 | $80 | |
| 60P | 0.075 | $30 | |
| ATM 72P 1.875 | ATM STRADDLE 3.650 | EXPIRES 12/14/23 | |
| FEB’24 75.575 | 70P | 1.400 | $560 |
| 65P | 0.575 | $230 | |
| 60P | 0.225 | $90 | |
| ATM 76P 3.675 | ATM STRADDLE 6.925 | EXPIRES 2/14/24 | |
| APR’24 81.525 | 75P | 2.475 | $990 |
| 70P | 1.325 | $530 | |
| 65P | 0.675 | $270 | |
| ATM 82P 5.275 | ATM STRADDLE 10.075 | EXPIRES 4/12/24 |
AUGUST’24 LEAN HOGS
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 95.925 | 10% BULL MOVE | 105.517 | 104C | 3.625 |
| 95.925 | 10% BEAR MOVE | 86.332 | 88P | 3.750 |
| 95.925 | 20% BULL MOVE | 115.110 | 114C | 1.500 |
| 95.925 | 20% BEAR MOVE | 76.740 | 78P | 1.525 |
| 95.925 | 30% BULL MOVE | 124.462 | 124C | 0.625 |
| 95.925 | 30% BEAR MOVE | 67.387 | 68P | 0.525 |
Bill Allen
Senior Account Executive
Direct: 1 312 957 8079
WALSH TRADING INC.
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Chicago, Illinois 60604
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