“Shootin’ The Bull”
End of Day Market Recap
by Christopher Swift
7/15/2024
Live Cattle:
Not a great deal of change to start the week off. Cash remains elevated, as do boxes, but both appear to have hit a ceiling. With no premiums anywhere, what you bid or offer today is the highest price there is. There is a wide basis gap, creating a measurable risk to assume. With no way to close the gap, without assuming immeasurable risk, the cattle feeder is left with hedging with what is available, or assuming the immeasurable risk. The assumption of immeasurable risk is the cattle feeder doing nothing. Attempting to mitigate risk would suggest flooring with what is available, and assuming a predetermined risk, with some potential to have the basis spread narrow in the cattle feeders favor. Futures traders do not appear willing to assume any of your risk. If they do become buyers, it will be perceived only to shore the basis up to whatever expiring contract month needs to move to for the cash trade that week.
Feeder Cattle:
Backgrounders are in the midst of the video sales. This week and next will be the bulk of. Cattle feeders own a tremendous amount of high priced inventory. Backgrounders have lost all futures premiums and now the appearance of an inverted market. Backgrounders will soon become dependent upon the cash trades as cattle feeders have for months on end now. I expect a little more trading to take place within the triangulating formations before a move lower. This weeks on feed and inventory report will help to see where we are. From USDA's last WASDE report, beef production for '24 has been raised, along with expectations for '25 to be lower, but in a state of flux due to uncertainty of next years production cycle. With the agenda believed hitting on all 8 at the moment, I see nothing but it picking up steam.
Hogs:
Hogs were mostly lower. The lean hog index was down $.27 at $88.38. I see very little to do in hogs.
Corn:
Grains and oilseeds were all sharply lower. The bear market continues.
Energy:
Energy ended soft today, but not before exploring both sides of unchanged. I am watching energy closely for any signs of breaking lower as I would take that as a signal for a consumer slow down. Gasoline lead the way lower today. This is the specific energy I will be watching.
Bonds:
Bonds were soft today. The events over the weekend did not cause much in the way of flight to quality, or much of anything actually. So, I continue to expect bonds to move higher.
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.
On the date of publication, Chris Swift did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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