“Shootin’ The Bull”
End of Day Market Recap
by Christopher Swift
2/11/2025
Live Cattle:
Cattle had topped and began to trade lower before two fundamental events arose. One was simply the redirection of cattle that were going on feed to further gains off wheat pasture. So, the normal number of animals, plus a few more that got redirected are anticipated to come back to the market this spring. The second was the closing of the southern border. The lack of information, and seemingly a great need for this inventory, leads me to believe there is something fishy going on. As the rally from the September '24 low advanced, it did so more under the conditions of cattlemen wanting to own more cattle, than the consumer calling for more beef. The rise in beef prices is not believed due to increased consumer demand, but the manipulation of slaughter in an attempt to gain margin. As well, with the exceptionally wide positive basis, it appears that only cattlemen were willing to pay as much as they did. Since this was seemingly a cattlemen's trade to own cattle, it will be more than interesting to see how the role of the consumer, that will be the ones paying for it in the end, will respond going forward. What is most obvious is that every sector is believed in great need of margins with only a higher price believed able to produce such.
Feeder Cattle:
The tiger trap was dug deeper today. Cattlemen hedging now will face greater probability of loss due to width of positive basis. Cattle feeders continue to have the roles reversed for them for which now they can buy incoming inventory dollars cheaper than today with some aspects of potentially more than $20.00 lower if materializes. Seemingly, there are few takers. The sentiment appears to have changed and even though there are a few still posting the whip on fire, and posting sales for which the seller most likely had no idea they would have fallen into such a rally, and the buyer for which now owns the most expensive inventory in history. Oh, and recall that this administration is attempting to rein in spending for which this entire rally has been based on spending.
Class III Milk:
Milk was higher today. I expect milk to continue higher. I recommend owning milk futures and December call options on milk futures. This is a sales solicitation.
Corn:
Grains were lower with the release of the WASDE report showing literally no change in stocks. I expect corn and beans to move higher with the drought in India having my attention for the wheat market.
Energy:
Energy was higher today. Diesel fuel is believed resuming its up trend. Support held at the 34 day moving average with a new high from the 1/27 low. I expect energy to continue higher.
Bonds:
Bonds, and notes, were lower today because inflation has stagnated while deeply entrenched in our economy. I continue to try to realize how much inflationary damage was done by the Biden administration and to what extent Trump can reverse, or the pain inflicted attempting to reverse. Supply lines have never been stripped to the extremes that 6 trillion dollars was able to. Demand that never was surfaced and to some extent continues to today, simply due to addiction spending what you don't have. Where did all the money go? To the companies that built or made the things you couldn't previously afford without the Covid monies spent on literally everything. The equities market is the most inflated of all markets for which benefited greatly from the handouts. If money gets a little short, we already have seen an up tic in the employment field. Next could be potentially tapping into equity gains.
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.
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