Pure Hedge - Livestock and Grain

5/19/26

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The Livestock Markets were mixed today, with the Feeders charging ahead. August'26 Live Cattle were 10 cents higher today and settled at 247.25. Today's high was 248.35 and the 1-month and contract high are 251.65. Today's low was 246.27 ½ and the 1-month low is 237.00. Since 4/17 August'26 Live Cattle are 4.30 higher or almost 2%. The August'26 Feeders looked strong today and had a big gain. The August'26 Feeder Cattle were 4.80 higher today and settled at 363.65. Today's high was 364.12 ½ and the 1-month and contract high are 379.45. Today's low was 357.22 ½ and the 1-month low is 351.97 ½. Since 4/17 August'26 Feeder Cattle are 2.17 ½ lower or more than 1/2%. The Hogs were lower again today. July'26 Lean Hogs were 60 cents lower today and settled at 102.15. Today's high was 103.30 and the 1-month high is 106.82 ½. Today's low was 102.00 and the 1-month low is 101.35. Since 4/17 July'26 Lean Hogs are 1.52 ½ lower or almost 1 1/2%. There is still confusion regarding the 17 billion in Agricultural purchases from China, but it sounds likely they will be buying US Beef. China reissued more than 400 export licenses to US companies, so I think it is just a matter of time before they enter the Cattle Markets again. Yesterday I sent out an email after the close that said impart “In 2021 China purchased $18.6 billion in US Ag, and Soybeans are not included in that number, but $4.2 billion in Livestock and Meats is included. We could see the beans break and the Cattle Markets rally very soon”. If history repeats itself, then I would expect somewhere around 3.75 billion in US Beef purchases. The August'26 Live Cattle were just 3.30 from the contract high of 251.65 at today's highs, and I feel we could see it trade above there before the end of the week. The August'26 Feeders were within 15.32 ½ of the contract high of 379.45 at today's highs, and l feel we can see that high challenged again soon. The Cash Market traded 264 today, and that is not bad for a Tuesday…  This month's Cattle on Feed report is this Friday, and so far, it looks like estimates on feed are at 102%, Placements at 108%, and Marketings at 90.6%. The numbers might look scary, but the numbers were very low last year, and this year there have been droughts and fires, so more cattle could have been placed in feedyards for that reason, and that is not helping retention and rebuilding the herd. I feel we could see the Cattle Markets trade higher through at least the first week of June. The Hogs look ugly, and there are probably a few branches left to hit below. There are a few trades I sent out yesterday shown below, take a look at them and give me a call if you have any questions. 

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This is what I said on Thursday 5/14

Yesterday, the August'26 Feeder Cattle traded down to 351.97 ½, and that was close enough to the 140-day moving average at 349.99 for me. I got out of my shorts in the Feeders and got long. Today the Cattle Markets pulled back a bit, but I think that was just from lack of new bullish news. The cash market has been on fire, trading 265 yesterday, and today I heard rumors a little higher, but nothing has been confirmed. This morning it appeared that China had granted licenses to US Beef Exporters, but that changed later in the morning and could have contributed to the price weakness today. I am Bullish again now and feel we can see new contract highs in the Fats and Feeders yet again through the First week of June. I feel it is possible to see the Fats trade up to 270 and the Feeders trade up to 385. We will see if the Cattle Markets catch a bid tomorrow. Any new trade deal with China pertaining to Beef would obviously be Bullish for the Cattle Markets and maybe the confusion this morning with the export licenses could be seen as a tell of what is to come. There is another story out involving the EU and Cattle from Brazil. It appears the EU has banned the importing of Beef from Brazil starting in September of this year, due to non-compliance of antimicrobial use regulations. Bullish Cattle through the first week of June unless new target levels are reached first. It was also announced today that starting on Monday, June 1st the daily price limits will be expanded in the Cattle Markets. The Live Cattle limits will change from 7.25 to 8.50 and the in the Feeders from 9.25 to 10.75. Give me a call if you have any questions, and let's get your account open. Have a great night.

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This is what I said on Tuesday 5/12

The Cattle markets tried to rally today, but there was too much nervousness in the markets, and the selling pressure knocked the Fats and Feeders down again, the fourth day in a row for the Feeders. Yesterday's rumors of tariffs being lowered on imported beef broke the market off the highs yesterday, very quickly. Then this morning before the open it was stated that the signing of that tariff change has been delayed or suspended until further notice. (These were both news reports, I have not seen anything official from the government yet). The Fats and Feeders opened higher this morning, with the June'26 Fats up 3.60 on the highs of the day, and the August'26 Feeders up 5.20 at one point. Then the market collapsed with the thought of the tariffs eventually being lowered, and others worried about the border being opened again sometime. The June'26 Fats had a range of 5.50 and settled 5.30 below today's high. The August'26 Feeders had a range of 11.60 and settled 10.95 below today's high. The Fats and Feeders are now both below their 7-Day, 14-Day, and 21-Day moving averages, with the Feeders much below. My next target level for the August'26 Feeders is 349.99, and that is the 140-Day moving average. I have a thought where it will trade next (if it trades 349.99), give me a call if you would like to hear more. The June'26 Hogs never had a chance today. They opened lower and stayed lower all day. I thought they would be pulled down if the Fats and Feeders broke, and we saw that today. Last week's Feeder Cattle Trade is still show below. Today, I structured and sent out a January'27 Feeder Trade when the January'27 Feeders were trading 345.85, let me know if you are interested in seeing it. 

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This is what I said on Thursday 5/7

Crude Oil continues to push commodity markets around, but maybe the Cattle Markets have finally decoupled from the Oil Market. June'26 Fats settled almost 3.50 lower today and the August'26 Feeders were down almost 7.00 on the day. The Hogs were lower with the Cattle today. The June'26 and July'26 Hogs both closed below the 7, 14, 21, and 140 day moving averages, and I feel they can continue lower from here. Hedge your Cattle, the Fats and the Feeders could trade anywhere tomorrow, but why not hedge a piece of it not far from all time high numbers now. April'27 Feeder Cattle settled at 347.27 ½ and May'27 Feeder Cattle settled at 344.97 ½. I heard the cash market traded 260 in Nebraska and Kansas today. June'26 Live Cattle settled below their 7-day and 14-day moving averages and their 140-day moving average is 234. I heard they might have been backing away from the Feeders today, as the August'26 Feeders settled below their 7-Day, 14-Day, and 21-Day moving averages. The 140-Day moving average for the August'26 Feeders is 349.51 ½. I still like the downside in Cattle Markets from here, at least for a while, or until the August'26 Feeders trade below 350. I can help, give me a call. The Trades from Monday are still shown below. 

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This is what I said on Tuesday 5/5

The Cattle Markets traded higher today and got back yesterday's losses, but I think we can see a slide lower by the end of the week. The Cash Market traded 255 yesterday and unless there is another surge in the cash market I think we can start to see the Fats and Feeders start to trade lower. At the very least, I would start to Hedge as far out as possible. If you tell the timeframe and or weight you would like to hedge, I will put a specific plan together for you at no cost, in the both the Fats and Feeders. The August'26 Feeders made a new contract high on Friday at 379.45, and then fell apart, closing 7.27 ½ below the new high, and 1.35 lower for the day. Yesterday, the August'26 Feeders dropped another 5.57 ½, and settled at 366.60. Today the August'26 Feeders rebounded, and picked up all of yesterday's losses, plus another 12 ½ cents. I do not have today's data yet, but yesterday the open interest in the Feeder Cattle dropped more than 3000 contracts. I like the downside in the Feeders and feel we can see it trade toward the 350 level and then decide what to do next. If the August'26 Feeders trade lower for the week, I feel it could drop quickly again. A 10% pullback from Friday's contract high of 379.45, would put the price at 341.50 ½, and the 200-Day moving average sits at 342.42 ½. The June'26 Hogs made a new 1-month low today and then bounced almost 2-dollars (1.95). The June'26 Hogs settled below the 7, 14, and 21 day moving averages and I feel we can see it trade lower from here, especially if the Fats and Feeders break. I feel we can see the Hogs trade back toward the contract lows at 93.10 in the June'26 contract month. The August'26 Feeders today settled 7.15 below the all-time contract high, and I feel it would be wise to start hedging. (don't forget the government wants the price of beef to be lower, and who knows what they can do next to try and make that happen, and the border will reopen someday…) Below there are a few trades I sent out yesterday, take a look at them, and let me know if you have any questions. Let's get that account open as well. Have a great night.
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Having a Trading or Hedging Account is essential for your business to be successful. Market volatility has increased across all commodities over the last 12 months, and I expect it to continue to increase over the next 12 months as well. Opening an account in the future, will not help you if you need access now. To be successful, you need to be able to manage risk in real time. If you are proactive now, you will have the ability to be reactive when you need to be. You can be Prepared and Patient at the same time. Call me or hit the direct link above.

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The Grain Markets were mixed today, with the Corn and Beans trading lower, and the Wheat settling with a small gain. July'26 Soybeans were 3 ½ cents lower today and settled at 1209 ½. Today's high was 1220 ¾ and the 1-month high is 1235. Today's low was 1208 and the 1-month low is 1171 ¼. Since 4/17 July'26 Soybeans are 27 ¼ cents higher or more than 2%. July'26 Corn slipped as well today. July'26 Corn was 1 ¾ cents lower today and settled at 475 ¼. Today's high was 481 ¾ and the 1-month and contract high are 487 ½. Today's low was 472 and the 1-month low is 455. Since 4/17 July'26 Corn is 17 ¾ cents higher or almost 4%. The Wheat Market stayed positive today. July'26 Wheat was 2 ¾ cents higher today and settled at 667 ¼. Today's high was 679 ½ and the 1-month and contract high are 688 ¼. Today's low was 661 and the 1-month low is 598 ½. Since 4/17 July'26 Wheat is 68 ¾ cents higher or more than 11%. Sunday night the government announced China was going to buy 17 billion in US AG, but no specifics were released, and we are still waiting to hear the details. In the meantime, the Grain shot higher, with the July'26 Soybeans gaining 36 cents yesterday, the July'26 Corn up 21 ¼ cents, and the July'26 Wheat up 28 ¾ cents. Today, the Corn and Beans were a little lower, with the Wheat making a small gain, with all markets waiting to hear specifics on China's purchases. I still feel the Soybeans are very overvalued, and if there are no “new” Soybean purchases, then I feel we could see a limit down move in the Soybeans. If “they” are calling China's previous purchase agreements from October, (of 25mt of Soybeans each year, for the next three years), new purchases, then there would not be any new Bean purchases, and I have a feeling this could be the case. In 2021 China bought 32.7 billion in US AG products, and 43% of that was for Soybeans. However, 56% of that purchase was for other US agriculture products, totaling $18.6 billion. Of the 18.6 billion, 22% of it, or 4.2 billion was used to purchase Livestock and Meats. I feel the 17 billion in US AG, China has agreed to purchase, will not include Soybeans, but will include Livestock, Horticultural Products, Dairy products, Cotton, Sugar, Ethanol, and the rest, but not Soybeans. If that is correct, Soybeans have no business being above 1200. We will find out soon, and if you like the downside in the Soybean Market, there is a trade for you below, along with a couple others. I am Bearish Soybeans and Bullish the Cattle Markets. Give me a call if you have any questions. Have a great night. 

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This is what I said on Thursday 5/14

It does not appear that there will be any new soybean purchases from China, and I believe that is why all the Grains broke today. The July'26 Soybeans are still too high in my opinion, and I think they can trade toward the 1100 level still. This morning I bought the July'26 1150 Puts and paid 9 cents for them. The July'26 Soybeans are well below the 7-day, 14-day, and 21-day moving averages and the 140-day sits at 1153 ¾. The July'26 Corn is also below the same moving averages, and the 140-day in July'26 is 460 ¾. The July'26 Wheat settled well above the same moving averages, but the 140-day moving average sits well below at 591 ¾ in the July'26 contract month. There are a few trades I sent out this morning below. Take a look at them and give me a call if you have any questions. Have a great night. 

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This is what I said about the Grains on Tuesday 5/12

The WASDE Report was released today and the Grains all traded higher, with the Wheat shooting 45 cents higher and settling on the new contract high at 479. The Beans and the Corn were modestly higher with the July'26 Soybeans settling 13 ¾ cents higher at 1226 ¾ and the July Corn up 4 ¾ and settling at 480. I would like to sell the, you know what, out of the Beans and Wheat, but will wait and see how it trades the rest of the week. If the Crude Oil ever breaks, it could send the Grains much lower, and so would no new purchases from China this weekend. The WASDE Report did provide another opportunity in the Soybean Oil, and it could surpass how well the contract has performed so far this year. I will be speaking to customers about it in the morning. If you are interested, give me a call. 

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Having a Trading or Hedging Account is essential for your business to be successful. Market volatility has increased across all commodities over the last 12 months, and I expect it to continue to increase over the next 12 months as well. Opening an account in the future, will not help you if you need access now. To be successful, you need to be able to manage risk in real time. If you are proactive now, you will have the ability to be reactive when you need to be. You can be Prepared and Patient at the same time. Call me or hit the direct link above.

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GOD BLESS AMERICA

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Bill Allen

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Pure Hedge Division 

Direct: 312-957-8079

ballen@walshtrading.com

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