12/1/23
The Cattle markets have continued to collapse, and I don’t believe they are done breaking yet. This past Monday I suggested selling into any strength. Tuesday the Cattle market was much higher… February’24 Live Cattle were 4.000 higher and settled at 172.825 and the January’24 Feeders were up 7.200 and settled at 227.425. It was a good trade if you took advantage of that bounce. Today February’24 Live Cattle broke 2.700 and settled at 169.125. Today’s low of 168.925 is just above the 1-month low of 168.625. Since 11/1 February’24 Live Cattle are down 16.050 or over 8 ½%. January’24 Feeder Cattle continued their collapse today and fell another 5.525 and settled at 214.425. Since 11/1 January’24 Feeder Cattle are down 23.500 or almost 10%. The Hogs were no different today. February’24 Lean Hogs dropped 1.375 today and settled at 70.100. Since 11/1 February’24 Lean Hogs are down 3.300 or almost 5 ½%. I don’t know where the bottom is for the Cattle markets, but I feel it is heading lower from here. I believe this is still the right environment to hedge or put on option trades in the Cattle markets. Next year’s prices: August’24 Live Cattle 168.075, August’24 Feeder Cattle 238.975, August’24 Lean Hogs 95.200.
LIVE CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 169.125 | 180C | 1.25 | $500 |
| 185C | 0.675 | $270 | |
| 190C | 0.400 | $160 | |
| ATM 169C 4.725 | ATM STRADDLE 9.325 | EXPIRES 2/2/24 | |
| APR’24 171.625 | 180C | 3.325 | $1,330 |
| 185C | 2.150 | $860 | |
| 190C | 1.375 | $550 | |
| ATM 178C 6.450 | ATM STRADDLE 13.275 | EXPIRES 4/5/24 | |
| JUN’24 167.550 | 180C | 3.300 | $1,320 |
| 190C | 1.525 | $610 | |
| 200C | 0.750 | $300 | |
| ATM 174C 6.700 | ATM STRADDLE 13.925 | EXPIRES 6/7/24 |
LIVE CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 169.125 | 165P | 2.925 | $1170 |
| 160P | 1.550 | $620 | |
| 155P | 0.800 | $320 | |
| ATM 169P 4.600 | ATM STRADDLE 9.325 | EXPIRES 2/2/24 | |
| APR’24 171.625 | 170P | 5.900 | $2,360 |
| 165P | 3.925 | $1,570 | |
| 160P | 2.475 | $990 | |
| ATM 178P 6.825 | ATM STRADDLE 13.275 | EXPIRES 4/5/24 | |
| JUN’24 167.550 | 160P | 4.675 | $1,870 |
| 150P | 2.100 | $840 | |
| 140P | 0.875 | $350 | |
| 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 |
| 169.125 | 10% BULL MOVE | 186.037 | 186C | 2.775 |
| 169.125 | 10% BEAR MOVE | 152.212 | 154P | 3.450 |
| 169.125 | 20% BULL MOVE | 202.950 | 202C | 0.975 |
| 169.125 | 20% BEAR MOVE | 135.300 | 136P | 0.800 |
| 169.125 | 30% BULL MOVE | 219.862 | 218C | 0.400 |
| 169.125 | 30% BEAR MOVE | 118.387 | 120P | 0.225 |
FEEDER CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 214.425 | 225C | 2.075 | $1.037.50 |
| 230C | 1.025 | $512.50 | |
| 235C | 0.750 | $375 | |
| ATM 214C 5.975 | ATM STRADDLE 11.525 | EXPIRES 1/25/24 | |
| MAR’24 217.225 | 225C | 5.925 | $2.962.50 |
| 230C | 4.400 | $2,200 | |
| 235C | 3.250 | $1,625 | |
| ATM 217C 9.250 | ATM STRADDLE 18.275 | EXPIRES 3/28/24 | |
| APR’24 221.175 | 230C | 6.850 | $3,425 |
| 240C | 4.075 | $2,037.50 | |
| 250C | 2.400 | $1,625 | |
| ATM 221C 10.575 | ATM STRADDLE 21.575 | EXPIRES 4/25/24 |
FEEDER CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 214.425 | 210P | 3.800 | $1,900 |
| 205P | 2.275 | $1,137.50 | |
| 200P | 1.375 | $687.50 | |
| ATM 214P 5.550 | ATM STRADDLE 11.525 | EXPIRES 1/25/24 | |
| MAR’24 217.225 | 210P | 6.025 | $3,012.50 |
| 205P | 4.400 | $2,200 | |
| 200P | 3.175 | $1,587.50 | |
| ATM 217P 9.025 | ATM STRADDLE 18.275 | EXPIRES 3/28/24 | |
| APR’24 221.175 | 215P | 7.700 | $3,850 |
| 210P | 5.875 | $2,937.50 | |
| 205P | 4.400 | $2,200 | |
| ATM 221P 10.400 | ATM STRADDLE 21.575 | EXPIRES 4/25/24 |
AUGUST’24 FEEDER CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 238.975 | 10% BULL MOVE | 262.872 | 262C | 7.125 |
| 238.975 | 10% BEAR MOVE | 215.077 | 216P | 6.575 |
| 238.975 | 20% BULL MOVE | 286.770 | 286C | 3.100 |
| 238.975 | 20% BEAR MOVE | 191.180 | 192P | 2.250 |
| 238.975 | 30% BULL MOVE | 310.667 | 310C | 1.400 |
| 238.975 | 30% BEAR MOVE | 167.282 | 168P | 0.725 |
LEAN HOG CALLS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 70.100 | 75C | 1.525 | $610 |
| 80C | 0.650 | $260 | |
| 85C | 0.300 | $120 | |
| ATM 70C 3.400 | ATM STRADDLE 6.700 | EXPIRES 2/14/24 | |
| APR’24 76.375 | 85C | 1.850 | $740 |
| 90C | 1.000 | $400 | |
| 95C | 0.550 | $220 | |
| ATM 76C 5.125 | ATM STRADDLE 9.875 | EXPIRES 4/12/24 | |
| JUN’24 92.225 | 100C | 3.125 | $1,250 |
| 110C | 1.175 | $470 | |
| 120C | 0.450 | $180 | |
| ATM 92C 6.325 | ATM STRADDLE 12.425 | EXPIRES 6/14/24 |
LEAN HOG PUTS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 70.100 | 65P | 1.400 | $560 |
| 60P | 0.575 | $230 | |
| 55P | 0.225 | $90 | |
| ATM 70P 3.300 | ATM STRADDLE 6.700 | EXPIRES 2/14/24 | |
| APR’24 76.375 | 70P | 2.400 | $960 |
| 65P | 1.275 | $510 | |
| 60P | 0.650 | $260 | |
| ATM 76P 4.750 | ATM STRADDLE 9.875 | EXPIRES 4/12/24 | |
| JUN’24 92.225 | 84P | 3.000 | $1,200 |
| 74P | 1.075 | $430 | |
| 64P | 0.400 | $160 | |
| ATM 92P 6.100 | ATM STRADDLE 12.425 | EXPIRES 6/14/24 |
AUGUST’24 LEAN HOGS
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 95.200 | 10% BULL MOVE | 104.720 | 104C | 3.475 |
| 95.200 | 10% BEAR MOVE | 85.680 | 86P | 3.425 |
| 95.200 | 20% BULL MOVE | 114.240 | 114C | 1.500 |
| 95.200 | 20% BEAR MOVE | 76.160 | 78P | 1.675 |
| 95.200 | 30% BULL MOVE | 123.760 | 122C | 0.775 |
| 95.200 | 30% BEAR MOVE | 66.640 | 68P | 0.625 |
I have market commentary and option charts in Pure Hedge – Livestock
and Pure Hedge – Grain at WWW.WALSHTRADING.COM
Call for specific trade recommendations.
1-312-957-8079
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Bill Allen
Senior Account Executive
Direct: 1 312 957 8079
WALSH TRADING INC.
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Chicago, Illinois 60604
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