12/8/23
The Livestock markets were higher today, and I think that provided another selling opportunity. February’24 Live Cattle were 3.200 higher today and settled at 165.725. The low today in Feb’24 Live Cattle was 162.675 and that’s just above the 1-month and 52-week low of 162.400. Since 11/8 February’24 Live Cattle are 13.750 lower or over 7 ½%. January’24 Feeder Cattle gained 5.025 today and settled at 215.300. Today’s low in Jan’24 Feeders was 210.400, not far from the 1-month and 52-week low of 209.150. Since 11/8 Jan’24 Feeders are down 17.475 or 7 ½%. Hogs gained today as well. February’24 Lean Hogs were 1.200 higher today and settled at 68.975, just above the 1-month and 52-week low of 65.800. Since 11/8 Feb’24 Hogs are down 5.875 or almost 8%. I feel that today’s small rally in the Meats was a gift, or opportunity to short the Cattle markets over the weekend, and I still like the idea of selling into any strength in the Cattle Markets. I believe the Live Cattle will head lower to 145-150 levels, and the Feeders will slide to the 180-185 level. I still 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 166.625, August’24 Feeder Cattle 235.000, August’24 Lean Hogs 94.575.
LIVE CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 165.725 | 180C | 0.800 | $320 |
| 185C | 0.425 | $170 | |
| 190C | 0.250 | $100 | |
| ATM 166C 4.775 | ATM STRADDLE 9.825 | EXPIRES 2/2/24 | |
| APR’24 169.300 | 180C | 2.825 | $1,130 |
| 185C | 1.775 | $710 | |
| 190C | 1.100 | $440 | |
| ATM 169C 6.975 | ATM STRADDLE 13.650 | EXPIRES 4/5/24 | |
| JUN’24 166.325 | 180C | 3.025 | $1,210 |
| 190C | 1.400 | $560 | |
| 200C | 0.675 | $270 | |
| ATM 166C 8.100 | ATM STRADDLE 15.875 | EXPIRES 6/7/24 |
LIVE CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 165.725 | 165P | 4.575 | $1,830 |
| 160P | 2.700 | $1,080 | |
| 155P | 1.525 | $610 | |
| ATM 166P 5.050 | ATM STRADDLE 9.825 | EXPIRES 2/2/24 | |
| APR’24 169.300 | 170P | 7.175 | $2,870 |
| 165P | 4.950 | $1,980 | |
| 160P | 3.275 | $1,310 | |
| ATM 169P 6.675 | ATM STRADDLE 13.650 | EXPIRES 4/5/24 | |
| JUN’24 166.325 | 160P | 5.250 | $2,100 |
| 150P | 2.450 | $980 | |
| 140P | 1.050 | $420 | |
| ATM 166P 7.775 | ATM STRADDLE 15.875 | EXPIRES 6/7/24 |
AUGUST’24 LIVE CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 166.625 | 10% BULL MOVE | 183.287 | 182C | 3.300 |
| 166.625 | 10% BEAR MOVE | 149.962 | 150P | 2.950 |
| 166.625 | 20% BULL MOVE | 199.950 | 198C | 1.100 |
| 166.625 | 20% BEAR MOVE | 133.300 | 134P | 0.850 |
| 166.625 | 30% BULL MOVE | 216.612 | 216C | 0.400 |
| 166.625 | 30% BEAR MOVE | 116.637 | 118P | 0.225 |
FEEDER CATTLE CALLS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 215.300 | 225C | 2.725 | $1.362.50 |
| 230C | 1.750 | $875 | |
| 235C | 1.125 | $562.50 | |
| ATM 215C 6.400 | ATM STRADDLE 12.500 | EXPIRES 1/25/24 | |
| MAR’24 216.075 | 225C | 6.525 | $3,262.50 |
| 230C | 5.025 | $2,512.50 | |
| 235C | 3.850 | $1,925 | |
| ATM 216C 10.175 | ATM STRADDLE 20.275 | EXPIRES 3/28/24 | |
| APR’24 219.200 | 230C | 7.250 | $3,625 |
| 240C | 4.600 | $2,300 | |
| 250C | 2.900 | $1,450 | |
| ATM 219C 11.600 | ATM STRADDLE 23 | EXPIRES 4/25/24 |
FEEDER CATTLE PUTS
| MONTH | STRIKE | PRICE | COST |
| JAN’24 215.300 | 210P | 3.975 | $1,987.50 |
| 205P | 2.475 | $1,237.50 | |
| 200P | 1.525 | $762.50 | |
| ATM 215P 6.100 | ATM STRADDLE 12.500 | EXPIRES 1/25/24 | |
| MAR’24 216.075 | 210P | 7.375 | $3,687.50 |
| 205P | 5.550 | $2,775 | |
| 200P | 4.075 | $2,037.50 | |
| ATM 216P 10.100 | ATM STRADDLE 20.275 | EXPIRES 3/28/24 | |
| APR’24 219.200 | 215P | 9.500 | $4,750 |
| 210P | 7.475 | $3,737.50 | |
| 205P | 5.750 | $2,875 | |
| ATM 219P 11.400 | ATM STRADDLE 23 | EXPIRES 4/25/24 |
AUGUST’24 FEEDER CATTLE
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 235.000 | 10% BULL MOVE | 258.500 | 258C | 8.100 |
| 235.000 | 10% BEAR MOVE | 211.500 | 216P | 7.250 |
| 235.000 | 20% BULL MOVE | 282 | 282C | 3.825 |
| 235.000 | 20% BEAR MOVE | 188 | 188P | 2.625 |
| 235.000 | 30% BULL MOVE | 305.500 | 304C | 2.075 |
| 235.000 | 30% BEAR MOVE | 164.500 | 166P | 0.950 |
LEAN HOG CALLS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 68.975 | 75C | 1.125 | $450 |
| 80C | 0.450 | $180 | |
| 85C | 0.225 | $90 | |
| ATM 69C 3.175 | ATM STRADDLE 6.375 | EXPIRES 2/14/24 | |
| APR’24 76.150 | 85C | 1.750 | $700 |
| 90C | 0.950 | $380 | |
| 95C | 0.525 | $210 | |
| ATM 76C 4.925 | ATM STRADDLE 9.700 | EXPIRES 4/12/24 | |
| JUN’24 91.425 | 100C | 2.800 | $1,120 |
| 110C | 1.050 | $420 | |
| 120C | 0.400 | $160 | |
| ATM 92C 5.825 | ATM STRADDLE 12.225 | EXPIRES 6/14/24 |
LEAN HOG PUTS
| MONTH | STRIKE | PRICE | COST |
| FEB’24 68.975 | 65P | 1.575 | $630 |
| 60P | 0.550 | $220 | |
| 55P | 0.225 | $90 | |
| ATM 69P 3.200 | ATM STRADDLE 6.375 | EXPIRES 2/14/24 | |
| APR’24 76.150 | 70P | 2.375 | $950 |
| 65P | 1.225 | $490 | |
| 60P | 0.625 | $250 | |
| ATM 76P 4.775 | ATM STRADDLE 9.700 | EXPIRES 4/12/24 | |
| JUN’24 91.425 | 84P | 3.150 | $1,260 |
| 74P | 1.125 | $450 | |
| 64P | 0.375 | $150 | |
| ATM 92P 6.400 | ATM STRADDLE 12.225 | EXPIRES 6/14/24 |
AUGUST’24 LEAN HOGS
| CURRENT PRICE | PRICE ACTION | PRICE AFTER MOVE | STRIKE | CURRENT PRICE |
| 94.575 | 10% BULL MOVE | 104.032 | 104C | 3.225 |
| 94.575 | 10% BEAR MOVE | 85.117 | 86P | 3.500 |
| 94.575 | 20% BULL MOVE | 113.490 | 112C | 1.575 |
| 94.575 | 20% BEAR MOVE | 75.660 | 76P | 1.400 |
| 94.575 | 30% BULL MOVE | 122.947 | 122C | 0.650 |
| 94.575 | 30% BEAR MOVE | 66.202 | 68P | 0.650 |
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
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Direct: 1 312 957 8079
WALSH TRADING INC.
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