“Shootin’ The Bull”

End of Day Market Recap

by Christopher Swift

​10/21/2024

Live Cattle:​

Not only did not a great deal transpire today, I don't expect much this week either.  Friday's on feed report is expected to be the same as the others, showing between 11 and 11.5 million head on feed.  The resilient consumer demand continues to be tested with higher box prices starting off this week and now over $322.00.  The rationing will continue until increased cattle production can be started.  That is looking a little rough at the moment with not only drought currently impacting cattle country, but aspects of a strengthening El Nino event.  So, cow liquidation, or no heifer retention, would keep about the same number of animals coming through the pipeline as this year.  With another round of rationing currently taking place in beef, cattle, and feeder cattle, a great deal of desire is going to be tested.  How desirable is the ownership of inventory with questionable margins and how desirable is a steak that takes an hours wage to earn, or three hours wages if eaten out?  I don't know the answer either, but I think we are going to find out sooner than later. I was unable to post cattle charts.  

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Feeder Cattle:​

Cattle feeders continue to bid higher with Friday's index reading second only to the historical high.  Both futures traders and cattle feeders are riding in the same car, and willing to push prices higher.  The backgrounder has gained leaps and bounds in basis convergence. Although no premiums are available, at least the futures discount is not $20.00 plus as it was earlier in the fall.  Like the fats, not much may transpire this week.  Cattle feeders need margin and margin is shrinking, not widening. Feed costs are expected to trade within a range, with the bottom end being tested most recently.  I hear as well of farmers asking an enormous basis for on farm stored corn in order to make up for potentially poor marketing procedures earlier this year.  If you are in fear of the price rising, buy the board where storage is significantly cheaper, you may benefit from a price rise, or potentially from a basis decline if corn does not move readily in the spring and early summer. I don't expect corn to move higher, but I am watching the drought with December of '25 being tracked.  ​I was unable to post cattle charts​

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​Hogs:

​Hogs were firm with the index up $.12 at $83.96.  

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Corn:  

​Corn, wheat and beans were all higher.  I expect corn and beans to continue trading within the current range.  Beans are testing the lows with corn still a little ways from.  The announcement out of Russia that they would see their grain under the table pushed wheat through the stops on Chicago and so far, have spared KC.  I recommended on the mid day to buy Chicago wheat with a sell stop to exit only at $6.07.  This is a sales solicitation.  ​

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Energy:

​Energy started off the week higher.  I expect energy to continue higher with the most recent decline in diesel fuel believed an opportunity to book current fuel needs, forward contract spring needs, or buy call options on crude oil.  ​​This is a sales solicitation.  

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Bonds:

Bonds are sharply lower with inflation just simmering along.  Energy prices are higher than September, as are cattle, beef and hog prices.  Gold and equities continue to climb to all time new highs.  So much for combating inflation as it appears the rate cut pushed the US dollar sharply higher, as well as a great deal of commodities.  At the moment, bonds are pushing sharply lower and have resumed a down trend.  ​​​​​​​​​​

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This is intended to be or is in the nature of a solicitation. An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of the margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.