Pure Hedge - Livestock and Grain

9/30/24

     The Livestock and Grain Markets closed mixed today. The Fats ended the day slightly higher. December'24 Live Cattle was 32 ½ cents higher today and settled at 184.80. Today's high was 185.20 and the 1-month high is 185.60. Today's low was 183.97 ½ and the 1-month low is 173.50. Since 8/30 December'24 Live Cattle are 7.35 higher or more than 4%. The Feeders were almost a buck lower. November'24 Feeder Cattle were 80 cents lower and settled at 244.90. Today's high was 246.55 and the 1-month high is 248.62 ½. Today's low was 244.20 and the 1-month low is 229.57 ½. Since 8/30 November'24 Feeder Cattle are 8.55 higher or about 3 ½%. The Hogs were down fractionally. December'24 Lean Hogs were 10 cents lower today and settled at 73.27 ½. Today's high was 73.80 and the 1-month high is 75.80. Today's low was 72.40 and the 1-month low is 70.55. Since 8/30 December'24 Lean Hogs are 52 ½ cents higher or almost 1%. The Livestock Markets were waiting to break all day, and they tried to head lower before the close, but the Fats stayed positive on the day, and the Livestock Markets settled mixed. It looks like there could be a strike at the East Coast and Gulf Coast ports starting tomorrow morning. A strike could affect the Livestock and Grain Markets, if products can't be shipped, and any delay of a week or more looks like it can cause logistic problems for weeks and possibly months. The President has stated that he will not intervein in the Strike, that could cost Billions in revenue. The FDA Commissioner Robert Califf spoke of the risk of Avian Influenza mutating, and infecting Humans, causing another pandemic. He was speaking of Dairy Cattle being infected and stated robust surveillance systems were needed. I am sure they will make everything more difficult than necessary. The average dressed Cattle weight last week was 858 pounds, 3 pounds more than the week before, and 30 pounds more than this time last year at 828 pounds. 

     The Quarterly Grain Stocks Report was released today, and it sent the Beans lower, and the Corn and Wheat higher. The Beans closed 5 cents off the lows today. November'24 Soybeans were 8 ¾ cents lower today and settled at 1057. Today's high was 1069 ¾ and that is the new 1-month high as well. Today's low was 1052 and the 1-month low is 995 ¼. Since 8/30 November'24 Soybeans are 57 cents higher or more than 5 ½%. The Corn Market made new highs again today. December'24 Corn was 6 ¾ cents higher today and settled at 424 ¾. Today's high was 427 ¾ and that is the new 1-month high as well. Today's low was 415 ½ and the 1-month low is 397. Since 8/30 December'24 Corn is 23 ¾ cents higher or almost 6%. The Wheat Market headed higher again as well. December'24 Wheat was 4 cents higher today and settled at 584. Today's high was 590 ¾ and the 1-month high is 598 ¾. Today's low was 575 ½ and the 1-month low is 544 ¼. Since 8/30 December'24 Wheat is 32 ½ cents higher or almost 6%. The Grain Markets did not know what to do after the Quarterly Stock numbers were released. Even the Beans were higher for a while until the Report was fully digested, and at the end of the day, there are plenty of Soybeans. The Soybean Quarterly Stocks number was 342 million bushels, the highest since 2020, with the average estimate of 351 million bushels. Soybean stocks were 78 million bushels more than last year, with 111mb on farm and that is up 54% from last year, and off farm 231mb and that is up 20% from last year. The 10-day forecast for Brazil is now showing scattered showers over the Northern part of the country as well. The Corn Quarterly stocks number was 1.760 billion bushels, with the average estimate of 1.844 billion bushels. Russia's Corn production is estimated to be down 29% and the lowest since 2018. Russia has also raised its duty on Corn exports 10-fold. The Fund shorts are also at a 4-year low in the Corn Market. The Wheat Quarterly stock numbers were 1.986 billion bushels, with the average estimate of 1.973 billion bushels. The dry weather in the Black Sea Region, will continue to limit the downside. We are still waiting to see how the Chinese will respond to the new EV tariffs put on China. The weather in the Midwest looks perfect for a quick harvest. There is a WASDE Report next month on the 11th, just 9 trading days away. If the yield changes for Soybeans in the WASDE Report, at the same time the rains could return in Brazil, I feel Beans would have a good chance to be priced with just three digits again.

-Bill

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Bill Allen

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