Pure Hedge - Livestock and Grain

10/4/24

     The Livestock Markets were mixed, as the Cattle Markets continued higher again today. December'24 Live Cattle was 60 cents lower today and settled at 187.00. Today's high was 187.35 and the 1-month high is 187.90. Today's low was 186.10 and the 1-month low is 173.50. Since 9/4 December'24 Live Cattle are 8.15 higher or about 5 ½%. The Feeders made a new monthly high today. November'24 Feeder Cattle were 1.15 higher today and settled at 249.27 ½. Today's high was 249.65 and that is the new 1-month high as well. Today's low was 247.37 ½ and the 1-month low is 226.27 ½. Since 9/4 November'24 Feeder Cattle are 14.22 ½ higher or about 6%. The Hogs were a little lower today. December'24 Lean Hogs were 25 cents lower today and settled at 76.15. Today's high was 77.02 ½ and that is the new 1-month high as well. Today's low was 75.77 ½ and the 1-month low is 70.55. Since 9/4 December'24 Lean Hogs are 3.60 higher or almost 5%. There were two more Dairy workers in California that were infected with H5N1. There have now been 15 people who work with Dairy Cattle or Poultry infected this year with Bird Flu. The bird migration will be here soon, and the FDA has already stated that testing for H5N1 will be needed nationwide. The Cattle Markets have been strong, and I don't know how much longer that can last. It looks like the port strike is over, so that should not have much effect on the Livestock Markets. I feel that one of the biggest risks in the Cattle Markets is the potential for the Stock Markets to break. Israel has stated that they were going to retaliate against Iran, and Iran has said that they will hit Iseral again if they do retaliate. and I feel that can cause instability in the Stock Markets, along with potentially drawing more countries into the conflict. For the December'24 Fats, I feel that 188.50 would be a tough level to get through, as that would be a new 1-month high as well. I feel that a more likely sicario is that the recent rally in Cattle Markets is nearing its end, and the December'24 Fats will turn back toward the 100-Day moving average of 183.34. The 50% retracement from the 52-week High/Low is 183.12 ½ as well. The Feeders made new monthly highs, but I feel that will turnaround as well. The November'24 Feeders traded up to, and through the 100-Day moving average of 249.50 and set a new 1-month high at 249.65 but slipped back below the 100-day and settled at 249.27 ½. I feel that the November'24 Feeders can head back toward the 50-Day moving average of 239.60. In addition to the 50-Day, 240.82 is 38.2% retracement from the 13-week low, and 240.72 is the 38.2% retracement from the 4-week high. The Feeders have been on a tear, and I feel that bubble could burst soon. I feel the Cattle Market is overbought, with the Cash Market only trading between 185-188 this week, and the Feeder Cattle Index down 1.47 to 246.78. Thank You again to the Texas Gentleman, for the phone call and the information. 

     The Grain Markets were all lower today and that might become the new theme for the Beans. November'24 Soybeans were 8 ¼ cents lower today and settled at 1037 ¾. Today's high was 1055 ¼ and the 1-month high is 1069 ¾. Today's low was 1036 ¼ and the 1-month low is 995 ½. Since 9/4 November'24 Soybeans are 16 ¼ cents higher or more than 1 ½%. The Corn Market was lower as well today. December'24 Corn was 3 ½ cents lower today and settled at 424 ¾. Today's high was 427 ½ and the 1-month high is 434 ¼. Today's low was 423 and the 1-month low is 397. Since 9/4 December'24 Corn is 12 cents higher or almost 3%. The Wheat Market dropped again today. December'24 Wheat was 13 ¾ cents lower today and settled at 589 ¾. Today's high was 604 ¼ and the 1-month high is 617 ¼. Today's low was 587 and the 1-month low is 560 ½. Since 9/4 December'24 Wheat is 9 cents higher or more than 1 ½%. November'24 Soybeans were down 28 cents this week, and I feel they will be heading lower, up to, and through the WASDE Report one week from today. The Facts will be the market mover going forward. There is some rain expected in Brazil this weekend, and the monsoons could return late next week, at the same time as the WASDE Report. I have been speaking with Farmers all week, and they have all said that the crops look amazing, and the yields are through the roof. It looks like the Corn and especially the Soybean crops have the potential to be bigger than what the USDA anticipated. StoneX raised their Soybean production numbers earlier this week, and Pro Farmers number were much higher than the USDA's estimates. If the Bean numbers continue to be what I am hearing, then the final numbers could be closer Pro Farmers estimates. I have a few trades ready to put on before the WASDE Report. If the Soybean production is greater than the USDA's estimates, and the Monsoons return in Brazil at the time, it will be one large market mover next Friday. I recommend continuing to sell calls and buy puts in Soybean Market. If you would like to know what the yield numbers are, that I have been hearing about, or are interested in my trade ideas, just ask. BALLEN@WALSHTRADING.COM There is still time if you wanted to be involved in these Markets before the report next week, but not much. 

BELOW - Brazil weather map for this evening.

-Bill

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Bill Allen

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