4/4/25
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The Livestock Markets began their inevitable decline today, as the Fats, Feeders, and Hogs were locked limit down. I guess the seasonal high is in for the Fats. June’25 Live Cattle were 6.50 lower today and settled at 198.20. Today’s high was 203.15 and the 1-month and contract high is 207.72 ½. Today’s low was 198.20 and the 1-month low is 190.00. Since 3/4 June’25 Live Cattle are 8.12 ½ higher or more than 4%. The Feeders were locked limit down across six different contract months today. May’25 Feeder Cattle were 8.25 lower today and settled at 274.87 ½. Today’s high was 281.32 ½ and the 1-month and 52-week contract high is 290.62 ½. Today’s low was 274.87 ½ and the 1-month low is 271.12 ½. Since 2/28 May’25 Feeder Cattle are 3.87 ½ higher or more than 1%. The Hogs were limit down as well today. June’25 Lean Hogs were 4.00 lower today and settled at 91.55. Today’s high was 94.42 ½ and the 1-month high is 99.70. Today’s low was 91.55 and that is the new 1-month low as well. Since 2/28 June’25 Lean Hogs are 1.60 lower or almost 2 %. I said it would be ugly, and it’s probably not over yet. I think it is safe to say that the Funds have started to liquidate their long position today. More than 42,000 contracts traded today and the open interest in the June’25 contract month is still large at 160,000 contracts. That is a lot of selling that still needs to be done. Over the last two days, the June’25 Fats have dropped 9.20. I anticipate there will be more selling next week. The daily limits have now expanded, since the market was locked limit down on the close. The daily limits on Monday will be 13.00 for the Fats and 16.50 for the Feeders. Obviously, I am still Bearish the Cattle Markets and like the same levels for starters. In the June’25 Fats I like the 190 level and then lower. The 100-Day moving average is 192.10, the 1-month low is 190, the 50% retracement from the 52-week high/low is 188.98, and the 200-Day moving average is 185.99. If the June’25 Fats were limit down on Monday, the price would be 185.20. I have said the Feeders would take a beating if the market broke like I thought it could, and there could be much more downside to come. I still like my same levels I have had for a long time. I like the 260-265 level for starters and does not sound crazy anymore does it. The 100-Day moving average is 267.18, the 50% retracement from the 52-week high/low is 259.13, and the 200-Day moving average is 256.63. If the May’25 Feeders were limit down on Monday, with the expanded limits, the price would be 258.37 ½. Shocking. The Hogs followed the same pattern as the Cattle Markets and closed locked limit down. A new 1-month low was made when the June’25 Hogs locked limit down at 91.55. The limits for the Hogs expanded as well and will be 6.00 on Monday. If the June’25 Hogs were limit down again the price would be 85.55. The 52-week contract low happens to be 85.75, crazy how that works out. These markets will be crazy for a while it looks like. You can always get protection in the Option Markets, and that is what I do. If we worked together, I know you would be covered for something like this. All you have to do is give me a call, and we can talk about it.
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I see two big trades for this year. I still like the Soybean Oil and the Natural Gas. These markets will correct.
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The Grain Markets were hit hard today with China matching the 34% tariffs. The Beans were knocked lower and made a new monthly low today. May’25 Soybeans were 34 ½ cents lower today and settled at 977. Today’s high was 1012 ¾ and the 1-month high is 1036 ½. Today’s low was 970 ¼ and that is the new 1-month low as well. Since 3/4 May’25 Soybeans are 22 cents lower or more than 2%. The Corn was able to climb back and stay positive today. May’25 Corn was 2 ¾ cents higher today and settled at 460 ¼. Today’s high was 462 ½ and the 1-month high is 477 ½. Today’s low was 449 ¼ and the 1-month low is 442. Since 3/4 May’25 Corn is 8 ¾ cents higher or almost 2%. The Wheat Market sank with the Beans today. May’25 Wheat was 7 cents lower today and settled at 529. Today’s high was 539 ½ and the 1-month high is 575 ¼. Today’s low was 520 ½ and the 1-month, and 52-week contract low is 517 ½. Since 3/4 May’25 Wheat is 7 ¾ cents lower or more than 1%. The Beans were hit hard today, but did close almost 7 cents off the lows. I believe trade deals are on the horizon, and I feel the Grain Markets can take off again shortly. I like the Same levels in the May Soybeans as well and think we can see them trade up to 1050 and then around 1100. The 200-Day moving average for the May’25 Soybeans is 1046, and the 50% retracement from the 52-week high/low is 1096. The Corn stayed strong today and gained almost 3 cents. I still like the 500 level and then higher for the May’25 Corn. The May’25 Wheat closed in the middle of a 19-cent range today and I feel it has big upside potential. The Russian Wheat crop has been cut from 81.5mmt down to 80.3mmt. Australian Wheat production will be down about 16% when compared to last year’s crop, and the Wheat planting here is expected to be the second smallest planting since 1919. If there are any wheat crop problems, it could shoot to the moon. That, along with the ever-present possibility of some major international factors driving the price of wheat higher again. I still like the same Wheat levels as well. I feel we can see the Wheat trade up to 600, and even the 650 level looks possible. The 1-month high is 575 ¼, the 200-Day moving average is 584 ¼, and then the 50% retracement from the 52-week high/low is 644 ½. I still like the Soybean Oil Market and believe it will turn around again soon. Soybean Oil stocks are down 11 ½% from this time last year. This is from Pro Farmer “Illinois raised its biodiesel blend rate to B17, with full B20 implementation on the horizon. Illinois continues to lead on sustainable fuels, as a 2022 bipartisan bill to promote higher biodiesel blends takes another major step forward. Beginning April 1, the minimum biodiesel blend required to qualify for a state tax exemption increased from B14 to B17 – meaning 17% of every qualifying diesel gallon must come from biodiesel, predominantly made from Illinois-grown soybeans.” There will be a meeting soon between the EPA and the National Biofuel Coalition and they will be recommending an increase in the Biofuels Blend Quotas Nationally. In addition, the Malaysian Palm Oil has gotten very expensive, and refiners are switching to Soybean Oil. Now is the perfect time to capitalize on this Market. Today the September’25 Soybean Oil settled at 46.09. I feel that this contract can trade up to 65.00. Give me a call and let me demonstrate how fantastic this market could be. The Dow Jones Index closed down more than 2200 points today. Have a great weekend everyone.
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August’25 Natural Gas 5-Year Chart Below.
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September’25 Soybean Oil 5-Year Chart Below.
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Bill Allen
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