11/17/23
The Cattle markets gained back a small amount of their recent losses today and for the week. February’24 Live Cattle was 1.475 higher today and settled at 176.800, that’s a gain of 2.150 for the week. Since 10/17 February’24 Live Cattle are down 14.400 or over 7 ½%. January’24 Feeder Cattle also had a small gain of 1.000 today and settled at 228.500, that’s a gain of 2.075 for the week. Today’s low in January’24 Feeders was 225.775, just above the weekly low of 225.250 on Monday 11/13. Since 10/17 January’24 Feeders are down 24.275, over 9 ½%. February’24 Hogs have regained some ground recently but gave a little back this week. Today February’24 Lean Hogs were 0.175 lower and settled at 75.450, down 0.325 for the week. Since 10/17 February’24 Hogs are 3.450 higher or almost 5%. I still think the Cattle markets will continue lower as a long-term view. The Cattle on Feed Report said that on November 1st there were 11.9 million head in feedlots with a capacity of 1,000 or more head, a 2% increase from year-ago levels and in line with the average pre-report trade estimate, and placements in feedlots during October totaled 2.16 million head, 4% above 2022.I believe this is still the right environment to put on option trades or to hedge in the Cattle markets. Next year’s prices: August’24 Live Cattle 173.600, August’24 Feeder Cattle 251.275, August’24 Lean Hogs 96.750.
LIVE CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 176.800 | 180C | 3.275 | $1310 |
| 185C | 1.700 | $680 | |
| 190C | 0.850 | $340 | |
| ATM 177C 4.650 | ATM STRADDLE 9.500 | EXPIRES 2/2/24 | |
| APR’24 178.425 | 185C | 3.300 | $1,320 |
| 190C | 1.975 | $790 | |
| 195C | 1.175 | $470 | |
| ATM 178C 6.275 | ATM STRADDLE 12.125 | EXPIRES 4/5/24 | |
| JUN’24 173.450 | 184C | 2.975 | $1,190 |
| 190C | 1.750 | $700 | |
| 194C | 1.225 | $490 | |
| ATM 174C 6.700 | ATM STRADDLE 13.925 | EXPIRES 6/7/24 |
LIVE CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 176.800 | 170P | 2.200 | $880 |
| 165P | 1.175 | $470 | |
| 160P | 0.625 | $250 | |
| ATM 177P 4.850 | ATM STRADDLE 9.500 | EXPIRES 2/2/24 | |
| APR’24 178.425 | 170P | 2.875 | $1,150 |
| 165P | 1.750 | $700 | |
| 160P | 1.050 | $420 | |
| ATM 178P 5.850 | ATM STRADDLE 12.125 | EXPIRES 4/5/24 | |
| JUN’24 173.450 | 164P | 3.375 | $1,350 |
| 160P | 2.400 | $960 | |
| 154P | 1.400 | $560 | |
| ATM 174P 7.225 | ATM STRADDLE 13.925 | EXPIRES 6/7/24 |
AUGUST’24 LIVE CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 173.600 | 10% BULL MOVE | 190.960 | 190C | 2.275 |
| 173.600 | 10% BEAR MOVE | 156.240 | 158P | 2.475 |
| 173.600 | 20% BULL MOVE | 208.320 | 208C | 0.600 |
| 173.600 | 20% BEAR MOVE | 138.880 | 140P | 0.525 |
| 173.600 | 30% BULL MOVE | 225.680 | 224C | 0.225 |
| 173.600 | 30% BEAR MOVE | 121.520 | 122P | 0.125 |
FEEDER CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 228.500 | 235C | 3.375 | $1,687.50 |
| 240C | 2.050 | $1,025 | |
| 245C | 1.225 | $612.50 | |
| ATM 229C 5.850 | ATM STRADDLE 12.175 | EXPIRES 1/25/24 | |
| MAR’24 230.975 | 235C | 6.850 | $3,425 |
| 240C | 4.975 | $2,487.50 | |
| 245C | 3.550 | $1,775 | |
| ATM 231C 8.675 | ATM STRADDLE 17.375 | EXPIRES 3/28/24 | |
| APR’24 234.500 | 250C | 4.100 | $2,050 |
| 260C | 2.275 | $1,137.50 | |
| 270C | 1.275 | $637.50 | |
| ATM 234C 9.975 | ATM STRADDLE 19.450 | EXPIRES 4/25/24 |
FEEDER CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 228.500 | 220P | 2.900 | $1,450 |
| 215P | 1.850 | $925 | |
| 210P | 1.175 | $587.50 | |
| ATM 229P 6.325 | ATM STRADDLE 12.175 | EXPIRES 1/25/24 | |
| MAR’24 230.975 | 220P | 4.450 | $2,225 |
| 215P | 3.175 | $1,587.50 | |
| 210P | 2.225 | $1,112.50 | |
| ATM 231P 8.700 | ATM STRADDLE 17.375 | EXPIRES 3/28/24 | |
| APR’24 234.500 | 220P | 4.350 | $2,175 |
| 216P | 3.400 | $1,700 | |
| 206P | 1.800 | $900 | |
| ATM 234P 9.475 | ATM STRADDLE 19.450 | EXPIRES 4/25/24 |
AUGUST’24 FEEDER CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 251.275 | 10% BULL MOVE | 276.402 | 276C | 5.725 |
| 251.275 | 10% BEAR MOVE | 226.147 | 228P | 5.800 |
| 251.275 | 20% BULL MOVE | 301.530 | 300C | 2.275 |
| 251.275 | 20% BEAR MOVE | 201.020 | 202P | 1.725 |
| 251.275 | 30% BULL MOVE | 326.657 | 326C | 0.900 |
| 251.275 | 30% BEAR MOVE | 175.892 | 176P | 0.500 |
LEAN HOG CALLS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 75.450 | 80C | 1.325 | $530 |
| 85C | 0.475 | $190 | |
| 90C | 0.200 | $80 | |
| ATM 75C 3.250 | ATM STRADDLE 6.075 | EXPIRES 2/14/24 | |
| APR’24 81.450 | 85C | 2.975 | $1,190 |
| 90C | 1.550 | $620 | |
| 95C | 0.775 | $310 | |
| ATM 81C 4.750 | ATM STRADDLE 9.050 | EXPIRES 4/12/24 | |
| JUN’24 95.000 | 104C | 2.400 | $960 |
| 110C | 1.250 | $500 | |
| 114C | 0.825 | $330 | |
| ATM 96C 5.275 | ATM STRADDLE 11.525 | EXPIRES 6/14/24 |
LEAN HOG PUTS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 75.450 | 70P | 1.100 | $440 |
| 65P | 0.375 | $150 | |
| 60P | 0.150 | $60 | |
| ATM 75P 2.825 | ATM STRADDLE 6.075 | EXPIRES 2/14/24 | |
| APR’24 81.450 | 75P | 2.075 | $830 |
| 70P | 1.050 | $420 | |
| 65P | 0.500 | $200 | |
| ATM 81P 4.300 | ATM STRADDLE 9.050 | EXPIRES 4/12/24 | |
| JUN’24 95.000 | 84P | 1.975 | $790 |
| 74P | 0.650 | $260 | |
| 64P | 0.225 | $90 | |
| ATM 96P 6.250 | ATM STRADDLE 11.525 | EXPIRES 6/14/24 |
AUGUST’24 LEAN HOGS
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 96.750 | 10% BULL MOVE | 106.425 | 106C | 2.900 |
| 96.750 | 10% BEAR MOVE | 87.075 | 88P | 3.200 |
| 96.750 | 20% BULL MOVE | 116.100 | 116C | 1.075 |
| 96.750 | 20% BEAR MOVE | 77.400 | 78P | 1.175 |
| 96.750 | 30% BULL MOVE | 125.775 | 124C | 0.525 |
| 96.750 | 30% BEAR MOVE | 67.725 | 68P | 0.425 |
I have market commentary and option charts in Pure Hedge – Livestock
and Pure Hedge – Grain at WWW.WALSHTRADING.COM
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Bill Allen
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Direct: 1 312 957 8079
WALSH TRADING INC.
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