Latest news with #Shootin'TheBull
Globe and Mail
24-04-2025
- Business
- Globe and Mail
Shootin' the Bull about significant divergence
'Shootin' The Bull' End of Day Market Recap 4/24/2025 Live Cattle: The manipulation of production and processing continues. Hindsight continues to be a reflection of what could have been done. The foresight, unfortunately isn't as clear. In my opinion alone, and not to be confused with fact, is that the spread between the optimism of the producer, and the street signs of the economy, are believed as wide as I can ever recall. Jack-in-the-box fast food restaurant announced it is closing 200 poorly performing stores. Wal-Mart has begun locking up their meat at the counter, and fast food restaurants are reeling from lower traffic and exceptionally high beef prices. The industry is changing rapidly in front of us. With hogs, it was driving them drastically below the price of production. In cattle, it appears the opposite of by driving prices drastically above profit margin capabilities. Only a dramatically higher price will return the input costs currently associated with placing cattle today. While I have been frowned upon, disagreed with, and argued with, I continue to believe that vertical integration is taking place, and with the size of capital requirements, it appears that maybe more than just corporations are in the hunt for market share. The poor basis position towards cattle feeders is of grave detriment, even though most every contract month is at, or near contract high. This goes back to when corn was at $8.00 and three years out was at $5.50 and today, three years later, corn is closer to $4.50 than $5.50. Hence, even with a very distasteful basis, you may actually be marketing at the highest prices available to you in the back months of futures. Feeder Cattle: I have been recommending to own the $285.00 August feeder cattle puts for a speculative position. This is a sales solicitation. The obvious is, as long as August remains above $285.00, the option will expire worthless. A 10% decline though would put these options in the money, with August down to around the lows made in February of this year. With hindsight 20/20 and foresight questionable, I continue to believe that averaging marketing's up, will be of more benefit than having to average marketing's were prices to soften. Unlike the fats, futures traders are instep with the index, offering a very beneficial basis environment to lay off risk into the future, regardless of price direction. Corn: Corn was firm. I anticipate corn to move higher. With planting fixing to hit its stride, I anticipate a firming market until all is planted. Energy/Bonds: Energy has been volatile again today, however, it is firmer. I anticipate energy to continue higher. Bonds were firm as well with notes tagging along. Equity share prices are sharply higher as the Presidents comments continue to be volatile, creating immense volatility in the market. 'This is intended to be or is in the nature of a solicitation.' Futures trading is not for everyone. The risk of loss in trading futures can be substantial; therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not indicative of future results, and there is no assurance that your trading experience will be similar to the past performance.
Globe and Mail
05-03-2025
- Business
- Globe and Mail
Shootin' the Bull about gut punching the cattle feeder
'Shootin' The Bull' End of Day Market Recap by Christopher Swift 2/27/2025 Live Cattle: Another gut punch today to cattle feeders with new historical widths of starting feeder/finished fat spread. These spreads are believed producing an agenda for which market share is sought. Nonetheless, inflation continues to reduce the buying power of the consumer, and packers have cut kills. All the while, cattlemen continue to pour capital into ownership of inventory. I see no reason to change strategies at the moment. The slightly higher futures has barely converged basis. This suggests that risk remains elevated with both basis and directional risk to contend with. It sure feels like something is going to give way. Whether that is to the upside or down, somebody has to have some relief. Feeder Cattle: Both futures and CME index are sitting at just under their previous highs. With great expectations of more inventory becoming available from south of the border and wheat pastures, it is more than interesting participants are pushing this issue to the very edge. I continue to believe cattle prices will follow the Moore Research seasonalities. Therefore, marketing within a few dollars of their known highs in futures and cash, with knowledge of how each derivative will impact your marketing's bottom line, it simply boils down to which risks you are willing to assume, how much of, and how much to pay for someone else to assume your risk. Then, the hard part is living with the consequence of your actions with the clarity of hindsight 20/20. Class III Milk: Milk was higher today. I continue to expect milk prices to rise. Corn: Downside targets came a little closer today. Beans finally began to break lower again as well. Wheat is plummeting as conditions appear very favorable for pulling cattle off to produce a wheat crop. Energy: Energy was higher in a believed correction of the hard selling the past few days. I expect energy to soften or trade sideways as the impacts of inflation continues to hamper consumers. Bonds: Bonds were lower today as the Advanced Durable Goods report showed no let up on the inflation front. Equities are believed softening as well. With multiple conglomerate food companies missing earnings and calling for lower sales, and a few with layoff's, it appears that some are taking note of the potential turn of the economy and doing something about it. Not the cattleman though! 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.
