Shootin' The Bull About Monday's Trade

Shootin’ The Bull”

End of Day Market Recap

by Chris Winward

9-30-24

Live Cattle:​

Last week's higher cash trade on Friday surprised many traders with mostly $1-2 higher in the south and $2-3 higher in the north.  It was on light volume and given the increase in weights and boxes below $300, I think the cash trade needs follow through this week to give any confirmation of a breakout higher. I encourage those who have to market inventory to not get complacent given the unknowns in the coming months.  Something to pay attention to is the development of the port strike story and what that will mean for beef exports that already have been somewhat anemic as of late.  Last week's export number was just over 10K MT which is about half of what most market participants would consider impressive.  Should a strike actually stop beef exports leaving in containers, It could impact as much as 30% of our total beef exports. On the positive side, the US dollar is just above the 2024 lows and a lower interest rate environment should lend support to commodities, including cattle futures. Choice boxes were up 1.39 @ 298.08 this afternoon.

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Feeder Cattle:​

Feeder cattle have made an impressive run with the front contracts adding nearly $20 since the low made on Sept 9th, a move that has provided producers hedging opportunities which many thought might not be possible when November futures were in the mid 220's a few weeks ago.  Many analysts are calling for another round of inflation regardless of who wins the election and although I can't disagree that may happen, I don't want to count on that when it comes to developing a marketing plan.  If that happens, input costs would most likely increase as well.  Today's Index reading was up $1.71 @ $247.24.  There is discount to the deferred months through May.  If the Index holds together, that should support the entire complex.  ​

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Corn:  

 ​Today's quarterly grain stocks report was friendly the corn market with the Sep 1 stocks print at 1.76 billion bushels vs 1.844 expected. On farm storage was the highest it's been in 4 years.  Today's price action suggests that corn has potentially put in a seasonal low and given the outstanding managed money short position, follow through on today's move can be expected this week, short of any outside market risk-off events.  Tonight's deadline for a US port strike is quickly approaching and while the majority of grains are exported on grain transport vessels (by workers not part of the longshoreman union), It could have a negative effect on the overall willingness of traders to bid the commodity complex in whole until an agreement is reached.  This afternoon's crop progress showed 21% of the US crop harvested vs 14% last week and 21% last year.  Brazil weather will be in focus this week.

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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. 

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