“Shootin’ The Bull”
End of Day Market Recap
by Christopher Swift
10/10/2024
Live Cattle:
Futures traders were able to eek out a new high and posted a second outside day. This one to the upside. With basis still slightly negative, meaning futures are higher than cash, I continue to recommend marketing inventory with an at the money put option. This is a sales solicitation. Inflation pulled another up tic today, further weakening the consumers buying power. Not only that, the 1.9% decline in energy prices last month will be replaced with potentially 5% to 15% higher this month. Even more so if energy does what is expected of it. So, once again, I think consumer resilience is going to be tested. So far, it is has been stronger than boars breath. As boxes having moved back above $309.00, we'll just continue to test that resilience.
Feeder Cattle:
So far, traders attempted to take out Wednesday's high and were unable today. There is no doubt in my mind it can be done, but will it be done, is the question. Even if it is, when discussing the resilience of the consumer to buy beef, what about the cattle feeders resilience to the higher price? Since this is such a puzzling time, and I am pretty sure I am not the only one puzzled, with technical indicators and price suggesting an area in which to conduct business, I continue to believe it is time to conduct business. If that is marketing, you are within less than $13.00 of the all time historical price of the index. If you are procuring, you are doing so less than $13.00 from the all time high. If there were any truth to "buy low, sell high", it appears that for the time being, sellers are selling at high prices. I continue to believe it time to protect what is available and speculate on whether you could have done better or not.
Hogs:
Futures were higher with the index up $.25 at $84.47. Basis converged considerably today.
Corn:
Corn and beans were lower with wheat higher. I expect more of the same. Corn and beans are expected to trade sideways as the US harvests and SA plants. Wheat is dry with little moisture expected to plant into. More so, world wheat supplies are in some jeopardy of the war for movement in the Black Sea region.
Energy:
Energy is sharply higher. I expect energy to continue to trade sharply higher as the US poor energy policy won't increase production and now massive destruction to clean up will increase demand for energy. Throw in all of the turmoil from the middle east and it appears the energy market is reversing higher. I recommend you do something to help mitigate the potential for a significant move higher in energy prices. Diesel was up over $.07 and crude up over $2.00 today. While this is a good jump start to the rally, I think the potential for higher prices leads me to continue to want to act instead of wait.
Bonds:
Repeat from Tuesday & Wednesday because it is what I believe. Bonds continue to push lower. Inflation continues and is believed causing significant financial hardships on more consumers every day. With a belief that either candidate will inflate the US again, this may have well been just a minor correction on a long road to higher rates.
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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