Pure Hedge – Livestock and Grain

Bill AllenGeneral Commentary

8/20/24

I have done my best to show the downside potential in the Cattle Markets. A lot of people disagreed with me, but that was about $25 dollars ago. We will see how the Feeders act if they get through my September’24 number of 231.50. September’24 Feeders made new 52-week lows today, when they traded down to 232.80, and if they trade through my 231.50 number and the 230 level, then my next number lower is 215.50, then sub-200. The Fats traded down to 175.00 in the October’24 contract. The current 52-week low in October’24 Live Cattle is 168.50. The funds have been getting out of their long positions in the Cattle Markets all week, and I feel that will continue to occur. If the Funds continue to liquidate and the Packers and outside traders want to push the market lower, then I feel that’s probably where the market will go. I think its time for us to have a conversation. October’24 Live Cattle were 3.42 ½ lower today and settled at 175.60. September’24 Feeder Cattle were 4.77 ½ lower today and settled at 234.50. October’24 Lean Hogs were 40 cents lower today and settled at 76.40.

     November’24 Soybeans traded up to 985 today, but settled unchanged on the day at 976. If the Beans trade into the 980’s again, I feel it would be a good level to put on a Bear Spread with Options. Take a look at the November’24 1000 Calls and the 950 Puts. You can put on a good Bear Spread using those two strikes, and fully capture a downside move. However, there is risk involved, and a trade like that would have to be watched constantly, but that is what I do. The Corn Market looks like it is stuck in purgatory, and waiting to rally. There could be a Corn rally toward the end of this week, as the September’24 contract expires on Friday for all the Grain Markets, and next week I feel a continued bounce could occur. I also feel that we will see Wheat Market start to head North again. I will have more later this week. November’24 Soybeans were unchanged today and settled at 976. December’24 Corn was 2 ¼ cents lower today and settled at 398. December’24 Wheat was 4 ¼ higher today and settled at 556 ½. 

-Bill

Bill Allen

Senior Account Executive

Direct:      1 312 957 8079

ballen@walshtrading.com

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