Shootin' the Bull about unexplainable price action

“Shootin’ The Bull”

End of Day Market Recap

by Christopher Swift

​

9/26/2024

Live Cattle:​

Price action today is pretty much unexplainable, without some conspiracy theories.  Boxes were sharply lower and cattle feeders paid up for inventory.  The CME index was a tad lower and futures higher.  So, do futures traders see something I or we don't?  I don't think so.  In my mind's eye, I believe artificial intelligence can calculate the number of contracts traded, average them into minutes and then include some distance of price move and once accomplished, the computer-generated trades then begin pulling offers, forcing buyers to bid higher to find a real order that won't be pulled when neared.  I think a lot of this has to do with reverse psychology.  If it truly is red hot demand coming in, I am not feeling the heat of and continue to believe any crack in the resilience of consumer spending would be expected to drop beef prices further than they have already.  Boxed are down over $20.00 from this summer's high.  

​

Feeder Cattle:​

A volatile move in feeders as well today.  Futures traders stepped up to the plate today and produced a little better basis than seen earlier this week.  The index continues to meander in a narrow range.  All eyes are on the packer and cattle feeder.  The packer seems to have traded themselves back into a negative margin with boxes lower and having paid higher for cash cattle this week.  Cattle feeders will now be watched to see if they want to add a little salt to the wound of bidding inventory higher with few aspects of profitability when viewing fat cattle futures.  Today was interesting nonetheless and I will anxiously await Friday's trade to see what I did or didn't miss from today's price action.  

​

​Hogs:

Hogs were a sharply lower.  The index was down $.16 at $84.05.​

​​​​

Corn:  

The hurricane hasn't even made land fall yet and it is believed that traders have already assessed the damages by running prices higher and now subsiding them a little.  No doubt this will cause significant flooding in areas but may not do much damage to crops.  As it is seemingly moving more towards the east, it lessens prospects of getting rain in the wheat belt for fall planting. ​

​

Energy:

​Energy is sharply lower today as the Saudi's pulled off their form stimulation by increasing supplies to the market.  Volume of sales is believed more profitable than higher priced, fewer sales.  They need money apparently, just like the US and China.  So, it is becoming pretty obvious that the world needs a little stimulation, all the while, inflation continues to simmer.  At present, it appears I am no longer wrong with the down trend believed resumed and expectations of a new contract low. ​

​​

Bonds:

​Bonds lower as well and made new lows from contract high this morning.  Bonds are fighting a major war between inflation and stimulation.  Today's reports continued to show inflation continuing to rise, albeit at a slower pace.  So, this sure feels like uncharted waters, but a conversation today may have me redirect that comment to, we've just built a bigger bubble to pop. ​​​​​​​

​

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.