“Shootin’ The Bull”

End of Day Market Recap

by Chris Winward

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10/1/2024

Cattle & Grains​

In my opinion, today's price action in much of the commodity complex was driven by outside market influences related to port strike headlines and rocket attacks in Israel from Iran.  Yesterday's friendly corn stocks report pushed corn up another 3 3/4 cents in today's session with the Dec contract @ 428 1/2, a new high close for this move.  The trade was looking for 1.844 b bu carryout heading into yesterday's report which printed a 1.760 b bu carryout as of Sep 1.   All grains got a boost today when the rocket attack news hit the wire with wheat ending up 13-14 cents higher on the day.  That move after a stocks report which was in line with expectations for wheat leads me to believe that any further development of that story could lead to further short covering of grain positions as we near the US election.  The port strike story is relevant to the livestock trade more than the grain trade in that 30% of US beef exports go through the ports effected.  That situation is inflationary in nature in that if an agreement is not made in the coming days or weeks, it will most likely push air and rail freights up as well.  10% of our beef exports is moved by air freight.  

The port strike could have less of an impact on grains, as most grain cargo vessels have separate workforces.  That being said, they are not immune from those impacts in that around 10 % of grain exports leave through those ports in those containers.  This could complicate moving the US corn harvest that as of yesterday was afternoon was only 21% complete.  The president can evoke the Taft-Hartley act which would require workers to come back for a 90 day "cooling off" period while negotiations take place.  What that does to worker productivity is another story.  I watched an interview with the president of the longshoreman's union today stating that productivity would decrease substantially during that time if evoked. In his words, "I will cripple you and you have no idea what that means".

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The cattle complex fared well today given these headlines and AM choice boxes printed at 300.18.  Last week's higher cash trade was welcomed, but it was on relatively light volume. We will look for follow through this week. After the recent flush and subsequent push on both feeders and fats, I believe producers should be looking at these levels as an area to place some hedges for open inventory.  This is a sales recommendation.  The unknowns of a potential further reduction of exports, reduced spending power of a US consumer and an upcoming election all lead me to believe that the cattle market could correct in the coming weeks.  

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