Pure Hedge – Livestock and Grain

Bill AllenGeneral Commentary


     Wow, there was some vicious price action today. I think this kind of volatility is here to stay. I am still Bearish the Cattle and Soybean Markets. If they don’t break these beans before May Options expire, I would expect a huge move lower in July’24 Soybeans the next trading day or week. The Livestock Markets were punished again today. June’24 Live Cattle was 2.42 ½ lower and settled at 171.47 ½. Today’s high was 174.02 ½ and the 1-month high is 186.62 ½. Today’s low was 170.25 and that is also the new 1-month low. Since 3/12 June’24 Live Cattle are 12.35 lower or almost 7%. The Feeders were in trouble today as well. May’24 Feeder Cattle were 3.95 lower today and settled at 234.20. Today’s high was 238.15 and the 1-month high is 260.60. Today’s low was 232.62 ½ and that is also the new 1-month low. The 52-week low is 216.67 ½. Since 3/12 May’24 Feeder Cattle are 22.50 lower or almost 8%. The Hog’s joined the Cattle and fell back down.  June’24 Lean Hogs were 3.72 ½ lower today and settled at 102.07 ½. Today’s high was 106.02 ½ and the 1-month high is 109.65, and that is also the 52-week high. Today’s low was 98.62 ½, and the 1-month low is 98.62 ½. Since 3/12 June Lean Hogs are 0.12 ½ lower or fractionally lower. Once again, the Cattle Markets ended the day and the week lower. June’24 Feeders are down 26.40 since trading the 1-month high of 260.60, and I feel there is still room to go lower. There was a lot of pressure from the outside markets again today on these heavy Cattle Markets. The Stock Market was down big again today, and the Dollar’s strength continued today. I feel that the Cattle Markets will continue lower from here and would recommend selling into any strength. My first downside target in June’24 Live Cattle was hit today at 171.02 and my next levels lower are 169.25 and 166.50. In the May’24 Feeders my first downside target was hit as well today at 234.67 ½. My next levels lower are 231.75 and 228.60. The Hogs had a terrible week. My first downside target today was 101.20 and it still is. My next level lower is 98.60. There is a lot of beef currently in the market. 

     The Grain Markets were all higher today, but that will change soon. May’24 Soybeans were 14 ¾ cents higher today and settled at 1174. Today’s high was 1179 ¾ and the 1-month high is 1226 ¾. Today’s low was 1154 and the 1-month low is 1151, and the 52-week low is 1128 ½. The 52-week low in July’24 Soybeans is 1140 ½. Since 3/12 May’24 Soybeans are 22 cents lower or almost 2%. The Corn Market looked good today. May’24 Corn was 6 ¾ cents higher today and settled at 435 ½. Today’s high was 437 ½ and the 1-month high is 448. Today’s low was 427 and the 1-month low is 424 ½. Since 3/12 May’24 Corn is 6 ¼ cents lower or almost 1 ½%. The Wheat was higher again as well. May’24 Wheat was 4 ¼ cents higher today and settled at 556. Today’s high was 562 ½ and the 1-month high is 574 ¾. Today’s low was 549 ½ and the 1-month low is 526 ½, and that is also the 52-week low. Since 3/12 May Wheat is 8 ½ cents higher or just over 1 ½%. The Grains continued to rally today after the WASDE Report. The report was Bearish for Soybeans. but friendly for Corn and Wheat. I feel that the Corn and Wheat Markets can continue to rally, and if something strange happens, the Wheat Market can takeoff. However, I am still Bearish the Soybean Market. The discrepancy between the USDA and CONAB’s Brazil production numbers is what is holding this market up. We will have to wait another month to see the next batch of numbers. The open interest in the May’24 and July’24 Soybean puts look interesting. The open interest in May’24 1100P is 14,179 and in the May’24 1140P its 10,207. In July’24 1100P its 12,926 and in the July’24 1140P its 6,268. I think that suggests a break in the market is on the way. If there is not a big break in the Beans before May’24 Options expire, then I feel a big break will occur the next day or week in July Soybeans (after May’24 expires). My downside targets in May’24 Soybeans are 1151 and 1140 ¼ and then 1128 ½. My downside for Corn is 424 ½ and the first upside target is 441 and then 448. My first downside target in Wheat today was 549, so I will keep it there, and upside level is 566. 



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Bill Allen

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