Pure Hedge – Livestock and Grain

Bill AllenGeneral Commentary Leave a Comment

7/10/24

  Well, it looks like the slide lower has begun… August’24 Live Cattle were 10 cents lower today and settled at 182.25. Today’s high was 182.77 ½ and the 1-month high is 188.25. Today’s low was 181.37 ½ and the 1-month low is 176.85. Since 6/10 August’24 Live Cattle are 2.27 ½ higher or more than 1%. The Feeders were knocked down for the fourth day in a row. August’24 Feeder Cattle were 1.37 ½ lower today and settled at 254.65. Today’s high was 256.25 and the 1-month high is 263.90. Today’s low was 253.45 and that is the new 1-month low as well. Since 6/10 August’24 Feeder Cattle are 4.30 lower or more than 1 ½%. The Hogs fell into a ditch today. August’24 Lean Hogs were 3.72 ½ lower today and settled at 84.67 ½. Today’s high was 87.87 ½ and the 1-month high is 92.42 ½. Today’s low was 84.65 and that is the new 1-month and 52-week contract low. Since 6/10 August’24 Lean Hogs are 5.55 lower or more than 6%. It’s been ugly but predictable. I believe this is the beginning of the slide lower in the Cattle Markets. There could be a bounce in the Live Cattle Market tomorrow, as yesterday’s August’24 low of 180.82 ½ was not breached today. If there is a rise in the Fats, I would use it as an opportunity to sell into strength. If the August’24 Live Cattle break through the 180.82 level, I feel it would head to the 178.04 level quickly. The August’24 Feeders traded through the 50% retracement from the 52-week high/low yesterday of 256.21, and never looked back. This could be a Bearish tell, of what is yet to come. The August’24 Feeders are also below the 200,100, and 50-day moving averages as well. Over the last four trading days August’24 Feeders are $9.02 ½ lower. There is only one big number left below this Market, and it’s the 52-week low of 229.50. I feel that the 240 level and lower are now in play. The Hogs have had a couple awful months. It was not that long ago, on 5/20, that the August’24 Hogs traded over $100 bucks. Today was even worse, setting a new 52-week contract low of 84.65 and settling just 2 ½ cents above that low. That price action did not look good to close the day, and if the Feeders continue to tank, they might pull the Hogs lower with them. 

     The Grain Markets look a little weak… December’24 Corn, November’24 Soybeans and September’24 Wheat all set new 1-month lows today, while the Corn and Beans also set new 52-week contract lows. The September’24 Wheat is just 6 ¼ cents above the 52-week low. Let’s start with the Beans. November’24 Soybeans were 13 cents lower today and settled at 1067. Today’s high was 1085 ½ and the 1-month high is 1163. Today’s low was 1066 and that is also the new 1-month low and 52-week contract low as well. Since 6/10 November’24 Soybeans are 91 ¾ cents lower or almost 8%. The Corn gave a little back today. December’24 Corn was 1 ¼ cents lower today and settled at 407 ¼. Today’s high was 409 ¼ and the 1-month high is 478. Today’s low was 404 and that is also the new 1-month low and 52-week contract low as well. Since 6/10 December’24 Corn is 61 cents lower or just over 13%. The Wheat Market continued lower as well. September’24 Wheat was 10 ½ cents lower today and settled at 561 ½. Today’s high was 572 ¼ and the 1-month high is 652 ¾. Today’s low was 556 ¼ and that is also the new 1-month low. Once again, the 52-week low is 550. Since 6/10 September’24 Wheat is 69 ¼ cents lower or almost 11%. It has been an ugly turnaround in the Grain Markets. China finally bought New Crop Soybeans, 132,000mt, and the Market broke 13 cents. Over the last three days November’24 Soybeans are 62 ¾ cents lower. I have been Bearish the Soybean Market for about eight months, and I still am. The November’24 Beans closed near the lows today, and I believe we will see more selling. There could be a bounce in the Market, and if there is, you should know what to by now. There is a massive, short position in the Soybean Market, and I feel they will continue to probe lower, to find the pain threshold, because they have not found it yet. I expect the Beans market to trade lower in several cent bursts, to find and trigger the stops in the Market, and when found it will only lead to continued aggressive selling. Everything is currently on the side of the shorts. The weather is great, the crops are good, and there are plenty of Beans in storage, with very little demand. Beans broke 13 cents on China’s first new crop purchase, what does that tell you? I feel that it’s likely we will see the Beans break the $10.00 level, sooner than later. There is a WASDE Report on Friday, and some short covering is likely to occur as well, and that’s opportunity. The Corn Market looks like it is trying to stabilize around the $4.00 level, and I feel we will see price rise before the WASDE Report. This looks like it could be a good time to start to buy the Corn again. The Wheat has been crushed recently, we will see if it breaks through the 52-week low or not. It was not long ago, on 6/4, that September’24 Wheat traded $7.00. I feel that this could be a good level to start to buy Wheat again, with the WASDE Report coming, along with crop stress in the Black Sea region. If the Wheat does rally, it could pull the Corn Market up with it. If you need to hedge or want to open a trading account, give me a call. We can open it now, at no cost, and fund it when you are ready to trade. Have a great night.

Bill Allen

Senior Account Executive

Direct:      1 312 957 8079

ballen@walshtrading.com

WALSH TRADING INC.

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