Pure Hedge – Livestock

Bill Allen General Commentary

2/9/24

It was a crazy week in the commodity markets. The Grains broke and the Livestock rallied. April’24 Live Cattle was 0.150 higher today and settled at 186.725, not far below today’s high of 187.475, which is also the 1-month high. Today’s low was 185.825 and the 1-month low is 172.775. Since 1/9 April’24 Live Cattle are 13.125 higher or about 7 ½%. The Feeders also gained today. March’24 Feeder Cattle gained 0.300 today and settled at 247.150. Today’s high was 248.350 and the low was 245.925. The 1-month high is 249.150 and the 1-month low is 224.600. Since 1/9 March’24 Feeder Cattle are 22.275 higher or almost 10%. The Hogs were higher as well. April’24 Lean Hogs were 0.800 higher today and settled at 81.150, not far above today’s low of 80.750. Today’s high was 82.400. The 1-month high is 85.925 and 1-month low is 76.725. Since 1/9 April’24 Lean Hogs are 2.650 higher or over 3%. The Grains continue to break as expected. March’24 Soybeans were 10 cents lower today and settled at 1183 ½, just two cents above today’s low of 1181 ½. Today’s high was 1198. The 1-month high is 1250 and the 1-month low is 1179 ¼. March’24 Soybeans settled just 38 ¼ cents from the 52-week low of 1145 ½. Since 1/9 March’24 Soybeans are 65 cents lower or over 5%. Corn continued to slide lower today. March’24 Corn was 4 ¼ lower today and settled at 429, just above today’s low of 428 ¼, which is also the 1-month and 52-week low. Today’s high was 437 and the 1-month high is 461 ¾. Since 1/9 March’24 Corn is 30 ¼ cents lower or about 6%. The Wheat Market closed positive today. March’24 Wheat was 8 ¼ cents higher today and settled at 596 ¾. Today’s high was 605 ½ and today’s low was 588. The 1-month high is 617 ¼ and the 1-month low is 573 ¼. Since 1/9 March’24 Wheat is 13 ¼ cents lower or over 2%. The Cattle markets have had a nice rally, but I believe that will end soon. The numbers might be lower, but the weights are up, and feed lots are full. I still feel that the Cattle Market will start to break again soon, and through the summer. The charts look very similar to 2014-2015. I highly recommend protecting your downside exposure. The WASDE Report was released yesterday, and there are a lot of Beans out there, and I believe lots of Beans will be planted here this year. The weather in South America has improved and will have a big crop again. I feel that another collapse in the Soybean Market is eminent. I feel the Corn Market will grind lower following the Soybeans. I feel that the $10.00 level in Soybeans is a real possibility this fall. I recommend protecting your downside in the Livestock and Grain Markets. I don’t want everything to break, but what happens if it does…

LIVE CATTLE CALLS

MONTHSTRIKEPRICECOST
APR’24 186.725190C2.300$920
195C0.950$380
200C0.375$150
ATM 186C 4.175ATM STRADDLE 7.650EXPIRES 4/5/24
JUN’24 183.975190C 2.800$1,120
 195C1.500$600
 200C0.800$320
ATM 184C 5.375ATM STRADDLE 10.775EXPIRES 6/7/24
AUG’24 182.725190C3.275$1310
195C1.925$770
200C 1.125$450
ATM 183C 6.200ATM STRADDLE 12.675EXPIRES 8/2/24

LIVE CATTLE PUTS

MONTHSTRIKEPRICECOST
APR’24 186.725180P1.475$590
175P0.675$270
170P0.325$130
ATM 186P 3.475ATM STRADDLE 7.650EXPIRES 4/5/24
JUN’24 183.975170P1.275$510
 165P0.725$290
 160P0.425$170
ATM 184P 5.400ATM STRADDLE 10.775EXPIRES 6/7/24
AUG’24 182.725170P2.150$860
160P0.850$340
150P0.325$130
ATM 183P 6.475ATM STRADDLE 12.675EXPIRES 8/2/24

OCTOBER’24 LIVE CATTLE

CURRENT PRICE PRICE ACTION PRICE AFTER MOVE STRIKE CURRENT PRICE
185.375 10% BULL MOVE 203.912 200C 2.125
185.375 10% BEAR MOVE 166.837 168P 1.925
185.375 20% BULL MOVE 222.450 222C 0.275
185.375 20% BEAR MOVE 148.300 150P 0.425
185.375 30% BULL MOVE 240.987 240C 0.100
185.375 30% BEAR MOVE 129.762 130P 0.075
CURRENT PRICE REFLECTS TODAY’S SETTLEMENT PRICE ONLY AND WILL CHANGE OVER TIME AND WITH VOLATILITY. THERE IS SUBSTANTIAL RISK OF LOSS TRADING FUTURES AND OPTIONS.

FEEDER CATTLE CALLS

MONTHSTRIKEPRICECOST
MAR’24 247.150250C3.375$1,587.50
255C1.775$887.50
260C0.925$462.50
ATM 247C 4.775ATM STRADDLE 9.400EXPIRES 3/28/24
APR’24 251.775260C3.425$1,712.50
 265C2.175$1,087.50
 270C1.350$675
ATM 252C 6.700ATM STRADDLE 13.625EXPIRES 4/25/24
MAY’24 255.675260C6.600$3,300
270C3.275$1,637.50
280C1.575$787.50
ATM 256C 8.450ATM STRADDLE 17.225EXPIRES 5/23/24

FEEDER CATTLE PUTS

MONTHSTRIKEPRICECOST
MAR’24 247.150240P2.075$1,037.50
235P1.075$537.50
230P0.550$275.00
ATM 247P 4.625ATM STRADDLE 9.400EXPIRES 3/28/24
APR’24 251.775240P2.650$1.325
 235P1.675$837.50
 230P1.050$525
ATM 252P 6.925ATM STRADDLE 13.625EXPIRES 4/25/24
MAY’24 255.675245P4.525$2,262.50
235P2.250$1,125
225P1.050$525
ATM 256P 8.775ATM STRADDLE 17.225EXPIRES 5/23/24

AUGUST’24 FEEDER CATTLE

CURRENT PRICE PRICE ACTION PRICE AFTER MOVE STRIKE CURRENT PRICE
269.450 10% BULL MOVE 296.395 296C 3.575
269.450 10% BEAR MOVE 242.505 244P 3.975
269.450 20% BULL MOVE 323.340 322C 1.050
269.450 20% BEAR MOVE 215.560 216P 0.850
269.450 30% BULL MOVE 350.285 350C 0.400
269.450 30% BEAR MOVE 188.615 190P 0.175
CURRENT PRICE REFLECTS TODAY’S SETTLEMENT PRICE ONLY AND WILL CHANGE OVER TIME AND WITH VOLATILITY. THERE IS SUBSTANTIAL RISK OF LOSS TRADING FUTURES AND OPTIONS.

LEAN HOG CALLS

MONTHSTRIKEPRICECOST
APR’24 81.150 90C0.350$140
95C0.125$50
100C0.050$20
ATM 83C 3.675ATM STRADDLE 7.100EXPIRES 4/12/24
JUN’24 95.000 106C0.850$340
  116C0.175$70
  126C0.050$20
ATM 96C 4.050ATM STRADDLE 9.100EXPIRES 6/14/24
JUL’24 96.575 106C1.375$550
110C0.750$300
116C0.325$130
ATM 96C 5.275ATM STRADDLE 9.975EXPIRES 7/15/24

LEAN HOG PUTS

MONTHSTRIKEPRICECOST
APR’24 81.15075P1.050$420
70P0.450$180
65P0.200$80
ATM 83P 3.425ATM STRADDLE 7.100EXPIRES 4/12/24
JUN’24 95.00086P1.625$650
 80P0.800$320
 76P0.500$200
ATM 96P 5.050ATM STRADDLE 9.100EXPIRES 6/14/24
JUL’24 96.57586P1.600$640
80P0.825$330
76P0.525$210
ATM 96P 4.700ATM STRADDLE 9.975EXPIRES 7/15/24

AUGUST’24 LEAN HOGS

CURRENT PRICE PRICE ACTION PRICE AFTER MOVE STRIKE CURRENT PRICE
96.450 10% BULL MOVE 106.095 106C 1.600
96.450 10% BEAR MOVE 86.805 88P 2.300
96.450 20% BULL MOVE 115.740 114C 0.525
96.450 20% BEAR MOVE 77.160 78P 0.800
96.450 30% BULL MOVE 125.385 124C 0.150
96.450 30% BEAR MOVE 67.515 68P 0.250
CURRENT PRICE REFLECTS TODAY’S SETTLEMENT PRICE ONLY AND WILL CHANGE OVER TIME AND WITH VOLATILITY. THERE IS SUBSTANTIAL RISK OF LOSS TRADING FUTURES AND OPTIONS.

THE ABOVE PRICES REFLECT CURRENT DATE AND SETTLEMENT PRICES AND EXCLUDES THE COST OF COMMISSIONS AND FEES. THERE IS A SUBSTANTIAL RISK OF LOSS WHEN TRADING FUTURES OR OPTIONS ON FUTURES AND EACH INVESTOR OR TRADER MUST CONSIDER WHETHER IT IS A SUITABLE INVESTMENT. PURCHASE OF LONG OPTIONS CAN RESULT IN THE LOSS OF THE ENTIRE PURCHASE PRICE PLUS COSTS.

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 

1.800.993.5449

Email me for free research. 

BAllen@walshtrading.com 

Bill Allen

Senior Account Executive

Direct:      1 312 957 8079

ballen@walshtrading.com

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