“Shootin’ The Bull”
End of Day Market Recap
by Chris Winward
10/3/2024
Cattle, Grains & Energy
Live cattle closed in the red with the October contract down $1.40 on the day. Yesterday's move was attributed to money flow and news of cash trade in Texas starting at 186 and 187 Ia/Mn. It was on light volume with only 68 head trading at that 187 level. As traders try to discern if ports backing up is bearish or bullish cash cattle prices, those who are bidding this market are giving producers more marketing opportunities than they had in recent past. I believe port issues are a negative force, but differences in opinions is what makes markets, right? One thing most can agree on is that it is inflationary and with less spending power and the unknowns in the coming months, consumers may have to make decisions based on their wallet instead of their preferences.
This morning's beef export commitment number was up 68% over last week at 22.5 MT with South Korea buying 7900 and China buying 6200 which was 3x what they did last week. Keep in mind they are on holiday Oct 1-7. This afternoon's boxed beef print was 299.81, down .01. Keep an eye on the choice/select spread and load counts to provide some color on consumer demand for higher cuts over the next couple weeks. The current spread is 16.51.
Feeder cattle closed mixed on the day with the front months dow 40 to 82 cents and the Jan and out up 2 to 65. Today's index reading was up 1.01 @ 248.25. The 250 level is one that could see some hedge pressure- we came within 80 cent of that level today on the November contract. Equities look at risk to correct, but the uptrend in feeders is still intact. Whats that old saying about a gift horse?
Over in the grains, we closed in negative territory across the board except bean oil. The lower trade could be attributed to SA rains in the forecast and favorable US weather as combines are rolling and harvest is accelerating. As with meat exports, theories about grain export disruptions caused by port closures during harvest are many. Due to infrastructure and work force differences I believe that although not immune, grain exporters currently have less exposure than other container goods. That story is still developing. Other headline risk is coming out of the Black Sea and Middle East, and I think the energy markets are telling us this will continue in the coming weeks.
Speaking of energy markets, crude is ending the session up over 5% on Middle East tensions and a high probability that Israel will retaliate against Iran at any moment, possibly on oil infrastructure. Opec is sitting on large reserves, but how large remains in question. Supply disruptions in the Straight of Hormuz are another risk, the extent of which is yet to be determined.
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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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