3/22/24
Everything is heading lower, in my opinion. There is still time to act, but it needs to happen now. The Cattle and Soybean Markets look poised to do what I expected and have been writing about. This appears to be the beginning of the big Cattle break. Today April’24 Live Cattle were 87 ½ cents lower and settled at 187.50. Today’s high was 188.60 and the 1-month high is 190.27 ½. Today’s low was 187.15 and the 1-month low is 184.47 ½. Since April’24 Live Cattle are 95 cents higher or about ½%. The Feeders took a beating today. April’24 Feeder Cattle were 3.12 ½ lower today and settled at 251.50. Today’s high was 254.97 ½ and the 1-month high is 260.80. Since 2/22 April’24 Feeder Cattle are 5.20 lower or about 2%. The Hog were also a little lower today. April’24 Lean Hogs were 32 ½ cents lower today and settled at 84.57 ½. Today’s high was 86.25 and the 1-month high is 88.32 ½. Today’s low was 84.12 ½ and the 1-month low is 83.15. Since 2/22 April’24 Lean Hogs are 2.62 ½ lower or 3%. The Cattle on Feed Report was released today, and it stated that 11.8 million head on March 1st, 2024. That is a 1% increase from March 1st, 2023. Placements in feedlots are 10% above 2023, totaling 1.89 million head. That was the largest number since 1996, when the series began. Marketings of fed Cattle in February totaled 1.79 million head, 3% above 2023. The number of Cattle and their weights are way up. I feel that with numbers like this, we will see a substantial move lower in the Cattle Markets. There is still time to capture some premium in the Option markets, but that time is short. I still expect the Fats/Feeders spread to have a wicked move in, and that started today. May’24 Soybeans started their implosion today. May’24 Soybeans were 19 ½ cents lower today and settled at 1192 ½. Today’s high was 1211 ¼ and the 1-month high is 1226 ¾. Today’s low was 1189 ¼ and the 1-month and 52-week low is 1128 ½. Since 2/22 May’24 Soybeans are 40 cents higher or almost 3 ½%. The Corn Market was a little lower today. May’24 Corn was 1 ½ cents lower today and settled at 439 ¼. Today’s high was 441 ½ and the 1-month high is 445 ¾. Today’s low was 436 and the 1-month and 52-week low is 408 ¾. Since 2/22 May’24 Corn is 20 ¾ cents higher or almost 5%. The Wheat Market pop higher today. May’24 Wheat was 8 cents higher today and settled at 554 ¾. Today’s high was 559 ½ and the 1-month high is 589 ½. Today’s low was 539 ½ and the 1-month and 52-week low is 523 ½. The Wheat market rallied right after the news of a Russian attack on the biggest Dam in Ukraine, possibly in the fear of flooding fields. Pro Farmer released its own survey on planting intentions today and it showed an expected 3% decline in Corn acres and an expected 4% rise in Soybean acres. This is just the beginning of the move lower, in both the Soybean and Cattle Markets. I said it would be a vicious move lower, and the move lower today, is just a taste of what I feel is yet to come. It’s going to get ugly, but there is still time to get things right, and capitalize on a move lower. A strong dollar has not helped the commodity markets this year. Since 12/22/23 the june’24 U.S. Dollar Index is up over 3%. This, along with a large Soybean carryover, and a big South American Crop, and an expanding soybean crop planted here. Along with China continuing to buy Grain from Brazil. In the first two months of this year, China’s purchases of Corn and Soybeans from Brazil has more than doubled, and their purchase of U.S. Corn and Soybeans has been cut in half, over the same two-month period. Next week Planting Intentions will be released, and I believe more Corn acres will be switched from Corn into Soybeans than expected. If the shift in acreage does happen, it should help stabilize the Corn Market somewhat, but if the Soybeans break down to the $10.00 level, I feel it will also put a cap on a Corn rally, if not eventually dragging it lower. The Soybean Market has continued to break after spiking higher early yesterday morning. May’24 Soybeans traded through the 1-month high of 1217 ½ and traded up to 1226 ¾, stopping short of the 13-week 50% retracement of 1232 ½, and broke from there. I feel the Soybean Market will have a $10 handle sooner than later. I think the first big target lower for May’24 Soybeans is 1150 and then 1128 ½, which is the 1-month and 52-week low, then head lower from there. I am here to help, give me a call.
-Bill
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Bill Allen
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