“Shootin’ The Bull”
End of Day Market Recap
by Christopher Swift
7/17/2024
Live Cattle:
Futures got off to a lower and slower start this morning. By the close, futures narrowed the basis in the spot month and firmed the rest of them. Energy was higher today, but still believed turning towards a bear market. Bonds were higher and I can't shake my belief that economic reports are masking a more troubled economy than represented. I continue to believe beef and cattle prices to be in jeopardy of a negative price reaction, due to the shifting consumers are perceived having to do. I think the futures market is expecting this due to the discounts offered. When the futures rise, it is simply converging basis to the higher cash trade. As box and cattle prices are just starting to soften, I recommend you use this time frame to do whatever it takes to put a floor underneath your cattle in production. This is a sales solicitation. I recommend using only a long put option at this time in order to allow for unabated convergence, while still maintaining a minimum sale price. You are correct that there is nothing special or enticing about this recommendation or hedge. The unfortunate part is, this is what you have to work with, whether you use it or not.
Feeder Cattle:
Cattle feeders continue to take the lead from futures traders in paying top price for inventory. Cash leading the way only suggests cattle feeders actually own inventory at the tip top price with no where to get rid of them at a higher price without substantial movement in fat cattle prices. The futures, offering no premium, would simply move higher to converge the basis. I recommend you do whatever it takes to put a price floor under production. This is a sales solicitation.
Hogs:
Hogs were higher. The lean hog index was up $.20 at $88.62. I see very little to do in hogs.
Corn:
The grain and oilseeds bear market continues.
Energy:
Energy was higher today. The products not as much as crude with a significant build in both gasoline and diesel fuel stocks. Crude stocks were lower. Potentially, a great deal of crude was refined, decreasing stocks, but slower consumer demand allowed for an increase in stocks of the products. I remain bearish and I do know how wrong I could be.
Bonds:
Bonds were higher today. I expect bonds to continue higher.
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.
On the date of publication, Chris Swift did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Disclosure Policy here.
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