Pure Hedge – Livestock and Grain

Bill AllenGeneral Commentary


 The Beans were higher today based on a strike in Argentina, and will continue their scheduled break later this week, and apparently the Cattle are too fat. Today June’24 Live Cattle were 1.42 ½ lower and settled at 177.15. Today’s high was 179.07 ½ and the 1-month high is 181.12 ½. Today’s low was 176.97 ½ and the 1-month low is 170.25. Since 3/28 June’24 Live Cattle are 3.10 lower or more than 1 ½%. The Feeders were also lower. May’24 Feeder Cattle were 67 ½ cents lower today and settled at 248.02 ½. Today’s high was 249.70 and the 1-month high is 251.30. Today’s low was 247.10 and the 1-month low is 232.62 ½. Since 3/28 May’24 Feeder Cattle are 70 cents lower or fractionally lower. The Hogs were unchanged today. June’24 Lean Hogs settled at 102.47 ½. Today’s high was 103.02 ½ and the 1-month and 52-week high is 109.65. Today’s low was 101.35 and the 1-month low is 100.17 ½. Since 3/28 June’24 Lean Hogs are 85 cents higher or almost 1%. The Cattle Markets still look heavy to me. The average dressed Cattle weight was up another pound from last week, to 848 pounds. The 5-year average is 817 Pounds. The Cattle slaughter number for last week was 613,000 head, down from 620,000 head from the week before, and 627,000 from 1 year ago. However, beef production last week was 516.6 million pounds, up from 510.4 million pounds a year ago. Fewer Cattle, but more weight. The USDA said the average Cattle weights held steady at 1,399 pounds, same as the week before, but much higher than the 1,352-pound average one year ago, and that is impressive. On Friday, the 5-day, 5-area weighted average price was $183.95, up from $182.58 the week before. Bird Flu has been found in another dairy herd in Colorado. Colorado is now the 9th state to have an infected dairy herd. A larger sampling and testing of milk was conducted last week, and the results imply the outbreak is larger than first thought. The USDA just said they will begin to test ground beef, in grocery stores, in the 9 states that have dairy cows infected with bird flu. We will see how the Cattle Market reacts to this new information tomorrow morning.

     The Soybeans followed the Soybean Meal higher today, because of a strike by the Oilseed workers union in Argentina, scheduled to last 72 hours. Ridiculous. Today July’24 Soybeans were 4 ¾ cents higher and settled at 1182. Today’s high was 1190 ¼ and the 1-month high is 1215 ¾. Today’s low was 1175 and the 1-month low is 1145 ¾. Since 3/28 July’24 Soybeans are 23 ¼ cents lower or almost 2%. The Corn was a little lower. July’24 Corn was ¾ of a cent lower today and settled at 449 ¼. Today’s high was 451 ¼ and the 1-month high is 454 ½. Today’s low was 445 ½ and the 1-month low is 435 ¾. Since 3/28 July’24 Corn is 5 ¼ cents lower or more than 1%. The Wheat lost some momentum today. July’24 Wheat was 13 ¾ cents lower today and settled at 608 ½. Today’s high was 623 ½ and the 1-month high is 633 ¼. Today’s low was 602 ½ and the 1-month low is 550. Since 3/28 July’24 Wheat is 32 ¾ cents higher or more than 5 ½%. I recommend taking advantage of these Bean prices while you can, because it won’t last long. The President for Cargill, in Brazil, Paulo Sousa said “Our view is that the Soybean harvest is not much worse than last year”. If that turns out to be accurate, it would be very Bearish for Soybeans. The Brazilian Soybean crop was 162mmt last year, and this year the USDA has an estimate of 155mmt and CONAB’s estimate is even lower at 147mmt. I have said many times, that I expected more acres of Soybeans to have been planted in Brazil, than were expected or reported, and the yields would be large. Paulo Sousa also said that the Soy output projections may be revised upwards. If the final number in Brazil, is at, or above the USDA number of 155mmt, I feel that the Beans would break hard, and if final number is anywhere near last year’s crop of 162mmt, I feel we will be talking about $10.50 Soybeans, and heading lower. 



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