Howdy & Welcome to Daily LRP!

Howdy,

Basis looks a couple different ways

​CME Feeder Cattle Index $243.22 NOV 2024 CME Feeder Cattle Futures $259.87=

-$16.65/CWT Basis (at the end of a month they cash meets the futures)

🚨Here is a new way to look at the numbers
CME Feeder Cattle Index High of all time Oct 2023 $254.10

November 24 Feeder cattle futures $259.87

-$5.77/CWT basis spread to the all time high.🚨

Feeders are holding. They had a good run today we had a $2.38 range but only held on to $1.00. This is signaling that the optimisum is still there. On one of the commentaries today the guy mentioned the correction. We corrected nearly $30/HWT or on a 1000 steer $300/head correction. He made a great point if that is what it takes to correct you could be in a for a hell of a ride.


SO WHAT SHOULD YOU DO? Will this really impact the Cow Calf Feeder market? I think we need to have some covered. Going back to my 25% of your total sales. This leaves you cattle to cover when we have potential highs coming. It is believed the trade early next week will run with this seemingly higher than expected number. This should send things trending down. The cow herd is most defiantly shrinking. The cattle that are being fed on the other hand is growing lager in carcass weights size and supplemented from new imported and domestic sources like Beef/Dairy crosses. I feel for all of you as this has my head spinning on why this is playing out this way. If you want to get some on, I have to have you locked in by 7:00 AM in morning, it would be way better the night before.


🚨 PLEASE READ CHRIS SWIFT 🚨

Mid Day Cattle Comment (Filling gaps)
Inbox

Chris Swift
9:56 AM (3 hours ago)
to Chris

April 23, 2024

Live Cattle:
Monday's rally wasn't too interesting for most as open interest increase by about 1,800 contracts. There is a lot of open interest that can be gained in this market from a historical perspective. I am reading information that suggests importers are getting caught up and no longer chasing bids. Cattle feeders have ample on feed and by feeding them longer, they are believed able to hold some command over price direction, albeit small. The issue is no longer believed supply, but demand. Supplies will continue to increase and with expansion seemingly kicked down the road, more lateral moves in production are expected that should keep beef supplies adequate at current retail prices. The spreads in the market are seemingly about the supply issue as many see fewer numbers down the road. I do to, but I am unsure whether that will make as much price difference in the future as today. Seemingly, the industry continues to find ways to stretch cattle and beef production to limits that may keep prices from reaching the expected lofty gains, then already achieved. As the buying seems to already be drying up, it leads me to expect a test of the gap before weeks end.

Feeder Cattle:
Here we go again. Are you ready this time? Do you have your account open, funded, and marketing plan written out as to how you will use futures, options, and the cash markets to achieve the highest potential price? Did the sharp declines impact your marketing plans? Is this time really it? Will feeder cattle prices really move to $300.00cwt plus per head? I don't know any more than you do whether they will or won't. So, let's make a marketing plan you can live with the consequences of, and begin marketing inventory in a manner that manages the inherent risk of livestock production. In my opinion alone, learning to live with your marketing decisions will be of the greatest benefit you can achieve in your business. Back month feeder cattle are diverging the basis, offering again the opportunity to market inventory at levels never achieved so far in the cash markets. I would be overly cautious in thinking that futures traders will offer you the width of basis they have previously. They may, but what you do with it matters more than them just providing it. It's like leading the horse to water, but can't make them drink. We offer abilities to market at prices never seen before, but not everyone will accept that price in hopes of even higher. Again, living with the consequences of your decision will help more than anything. I think this price range is interesting due to most contract months being just above the 34-day moving average, but still $6.00 to $8.00 away from the down trend line of the triangle. In my opinion, I would expect the move to the top of the triangle to subdivide into 3 waves. Wave a is believed wrapping up at today's high. A wave B may test or fill the gap, with wave C testing the down trend line of the triangle. Time frame of this is expected to be very near the end of June when the big video sales get cranked up.
​
I encourage you to read Chris Swift’s article today! He always has interesting things to say they are found under Mid day and “Shootin the Bull"