“Shootin’ The Bull”
End of Day Market Recap
by Chris Winward
10/2/2024
Cattle & Grains
Today's strength in the livestock futures was impressive with fats, feeders and hogs all posting solid gains. The November contract led the way closing up $3.72 @ 248.40. In the fats, the December contract closed up $2.32, retracing the entirety of the August selloff and closing over $14 from the low posted on 8/21. There are a lot of ideas as to who or what fundamental situation is behind this move in relation to shortages caused by port strikes. Most are pointing to fund buying and shorts who are adding to that buying pressure by liquidating positions. The good news is that regardless of who or what is behind this move, it is providing marketing opportunities that were not available since the beginning of August.
Today's pm choice boxed beef trade dipped below the $300 level and closed down 36 cents at 299.81. The Feeder Cattle Index closed down .14 cents at 247.29. In my opinion, this move is purely in anticipation of what might happen, not what has happened. So if the anticipation of consumer hoarding leading to boxed beef prices skyrocketing like they did during Covid is behind this move, the evidence is not there yet. The other side of this equation is consumer spending power and how that might change if this situation develops further and leads to another bout of inflation. I doubt there will be stimulus checks this time around to help the consumer if beef prices increase. Cheaper proteins like chicken are not immune from price fluctuations due to ports backing up and if we can't export chicken, we have to sell it here. Long story short, the narrative can change quickly as it often does. Any resolution of port strike issues will quickly make this situation an afterthought.
Over in the grains, corn posted another gain with closes above key moving averages with support from energy and wheat, which closed up 15 cents on news of overnight drone attacks on Odessa ports. Adding to that strength was news of worsening drought in Russia and a downgrade of the Australian crop. Soybeans and meal closed in the red on increased chances of rain in Brazil and Argentina in the 10-14 day forecast. Traders will now look to next week's USDA crop production report on Oct 11th @ 11 am.
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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