Shootin' the Bull about not much of anything

“Shootin’ The Bull”

End of Day Market Recap

by Christopher Swift

​

9/25/2024

Live Cattle:​

Price action today was seemingly of a lot of traders not knowing what to do.  I think that is because with the even basis now, price direction becomes more important.  Any hint of the consumers resilience fading, or cattle feeders show reserve in their bidding, would suggest to anticipate a sharply lower trade.  Status quo on demand or cattle feeder desire, and it would be difficult to see prices rise much.  Greater employment, another stimulus package, wage increase or a dramatically lower fuel price would lead me to believe the consumer could then increase consumption or be willing to pay a higher price.  In my opinion alone, I think traders and producers alike are walking a very thin line through uncharted waters.   

​

Feeder Cattle:​

With basis now negative to some months, even, or much narrower positive spread, direction of the index will be the vehicle and only the cattle feeder is behind the steering wheel.  Were cattle feeders to believe the consumer's resilience will last, they may actually bid higher.  Were cattle feeders to see the consumer resilience fade, I think they would fold their hands to see how far prices would decline before stepping back in.  Although futures have been around the world and back, the cash market has stagnated.  The next most probable move will be whether or not the cattle feeder bids higher.  What do you think they will do?  They are losing $200.00 per head on the old scale of cattle feeding and most likely just breaking even if affiliated with a vertically integrated line of production.  The boxes are softening and the US has had to cut rates by a half point and China a trillion dollar stimulus.  Again, what do you think they will do?  That's the question you need to answer yourself and then take action accordingly. 

​

​Hogs:

Hogs were a tad lower, barring October.  The index was down $.08 at $84.21.​

​​​​

Corn:  

A lot of price range in the grains.  The hurricane was an unexpected event that helped to push grains higher.  Although it is expected to hamper harvest, it is not expected to damage yield of corn.  Beans may be a different story due to the amount grown on the east coast susceptible to flooding. Wheat was higher, but may not get much of the moisture promised for the east.  Wheat appears to want to trade higher.  I wouldn't attempt to stop it.  ​​

​

Energy:

​Energy is weak today.  Whatever issues there were to push it higher appear to be subsiding.  Even though I have been wrong the past week, I expect the down trend to resume.  ​

​​

Bonds:

​Bonds were lower again today as some market's, especially equities, continue to inflate.  I think this bout of inflation was spurred by short covering, the Fed's half point rate cute and China's stimulus this week.  As this is baked into the market, I expect the contraction of consumer spending to continue, exposing the economic weakness, leading to a resumption of the down trends in several markets.  Cattle one of these.  Especially due to price.  Don't be confused by the higher futures trades you see.  Most were never matched by cash and cash is lower, but not substantially as it could be.  ​​​​​​​

​

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. 

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.