“Shootin’ The Bull”
End of Day Market Recap
by Christopher Swift
12/10/2024
Live Cattle:
There is little to hash out. The industry is changing and higher prices are expected to quicken the change. Higher prices will cure high prices. What we are testing at the moment is how high that price has to be.
Feeder Cattle:
Winners of bids at sale barns are believed doing so at a cost that may or may not be able to be returned. At the moment, that is of little consequence as cattlemen, in every nook of production, are attempting to find their place in the changing business practices. Futures and options may help some, but little can be done when paying top dollar today and top dollar is not being paid in the future, and input costs are not going down.
Hogs:
Hogs were sharply lower today. The lean hog index was down $.27 at $83.46. Hogs broke hard today and are expected to continue lower as the index is in a bear market as it has exceeded the mid-October low. The massive long commodity fund position seems opposite of the cash market's movement. The funds have done an excellent job for producers who don't have contracted hogs in offering a price nowhere to be found in the cash markets at the moment. The near $18.00 negative basis is believed enticing as that price may or may not be available when the summer of '25 rolls around.
Corn:
July corn broke out of its triangle today, leading me to expect more upside potential. Cattle feeders that aren't fixing their variable input costs are believed assuming additional risks to the price already paid for incoming cattle.
Energy:
Energy has been higher for most of the day. I believe energy has made a bottom and anticipate price movement higher. With the price of cattle at the tip top, and you maybe owning them, feed and fuel costs may help some, but unlikely for either of those to drop dramatically enough to offset the price paid for incoming inventory. Therefore, with potentially only a small benefit towards further downside trading, but a huge issue were either, or both to move higher.
Bonds:
For a little insult to injury, interest rates are a little higher today as well. Inflation continues to simmer on medium with the current administration still pouring money out to everyone before they leave office. The counter to this is expected to produce some loud screams with weeping and gnashing of teeth from pulling back on government spending.
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