“Shootin’ The Bull”

End of Day Market Recap

by Christopher Swift

​1/8/2024

Live Cattle:​

Chris and I have been pushing to get every client called while prices are still elevated.  If you have not received a call yet, you will, or better, just call us. I made the recommendation to own an at the money put option on every head of production out to the October time frame. This is a sales solicitation. I do not know to what extent a cattleman will go to in order to acquire inventory.  We are discovering that right now.  With profit projections based solely upon a continual rising price, it appears that risk is taking on many forms. I recommend you market some inventory in an attempt to achieve the highest price possible known at this time.  With winter storms in the northeast and fires in California, there won't be a great deal of activities to support excess beef demand for a while. 

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​Feeder Cattle:​

On the mid day cattle comment, I recommended to lay off every head you own for spring marketing's with an at the money put and selling a $10.00 out of the money call. This is a sales solicitation.  For the August and out, I recommended to own the at the money put option.  This is a sales solicitation.  There is little to discuss.  The rationing appears to be taking its toll.  Whether another round will be needed at some time or not will be interesting. Protect your operation, your lenders money, and your sanity.  A put option can go a long way in helping to protect against a price decline for a small percentage of the value of the contract.   

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​​Hogs:

​Hogs were soft with the index down $.42 at $81.59.  I expect hogs to continue lower.  ​​​

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Corn:  

All three were soft today.  I would like to see corn pull back a little more to add obtain more of the at the money July corn calls.  I did recommend buying soybean meal calls today.  Soymeal bottomed, made what appears as a 5 wave move higher, with a gap.  The past couple of days it has traded softer with today's softer trade filling the gap.  There is significant hog, and poultry production growing that fixing some input costs on feed perceived as beneficial.  If you feed pigs, chickens, or catfish, I recommend buying the at the money July soybean meal call options.  This is a sales solicitation.  ​

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Energy:​​​​​​

Energy traders pushed spot crude to a new high above $75.00 today.  They sold it off afterwards, but to no great extent.  Somewhere between here and a dollar lower would spark my attention to add to previously recommended positions.  Demand for energy and a great deal of countries that are energy deficient, leads me to expect energy prices to continue higher.  Don't leave out China. They are in the doldrums now, but can spark stimulation like Viagra if needed.  ​

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Bonds:

Bonds traded to new contract lows again today, but at the close was unchanged on the day. The shorter term notes were barely plus on the day.  I believe interest rates and inflation are hampering consumers and the economy for which are not reflected in government reports.  Most likely due to government reports being manipulated for which revisions are made often.  The US dollar was higher again today with gold and copper still moving higher.  ​​

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A commentary read today offered a little insight into the up coming Trump administration.  Of the most interesting was how he was treated in his first term.  Potentially naive on some aspects, and just not as familiar with others, didn't produce some of the goals set out.  This time, he will be very familiar with who is who, and what they are, or are not capable of achieving.  Putting more private class citizens in high places over politicians is believed to bring expertise into the building of economic infrastructure over a politician for which time has shown them to be very incompetent. Debt and spending is all that has taken place the past 4 years.  I expect less spending and a cut in government debt over the next 4 years.  

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​​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.