Cash Cattle: Cattle caught a bid today, the last business day of the month. On light trade Nebraska traded $155 live. Dressed traded up 3 dollars at $245. Iowa dressed traded $243.00. The USDA reported choice cut out down $0.90 at $245.99 and select down $0.49 at $234.78.
August Fat cattle settled up $1.25 at $155.90. This is the highest settlement in 3 weeks. October settled up $1.25 at $155.90, December up $1.25at $153.90. These were 3 week high settlements across the board. Fat cattle, technically, have now re-traced over 62% of the $13 dollar break we saw after contract high was posted just a month ago.
September feeder cattle settled up $1.50 at $218.65, which is the highest settlement in 3 weeks. Today’s 3 week high retraced over %62 of the 1-month, $16.00 sell off we saw from the July 31st contract high at $224.67 down to the 2-month low of $208.26 posted just 6 trading sessions ago. October settled up $2.15 at $2.16.90. November settled up $2.47 at $214.40. These were 3 week high settlements as well.
Today looked like light volume, pre-holiday position squaring. With the well followed retracement level of %62 now breached, Tuesday’s settlement will be significant. A new high move would open the door to a test of the contract high. However, a failure there combined with any seasonal weakness in the cash prices might open the door up for another test of the recent 2-month lows. Tuesday should be pivotal trade for both bulls and bears.
Hedgers:This rally has given you a gift to get your downside puts on cheaper. You can protect $150.00 fat cattle for the next 161 days with a February put option for 3.00/cwt. Protect feeder cattle for the next 153 days at $2.00 for 3.00/cwt with a January dated put option.
Hog Comments
Futures: October settled LIMIT BID at $98.47, which is the highest settlement in 2 weeks. December finished up $1.75 at $92.12 which is a 3-week high settlement. February closed up $1.00 at $90.90, also a 3-week high settlement.
The demand in the cash market continues to be the concern for the hogs. Today’s future action looked more like end-of month position squaring. Tuesday’s trade and settlement should give a better indication of continued strength. Just 8 trading days ago, October posted a 7-month low on August 21st down at $90.45. This was the bottom of the 2-month, $28 dollar blood-letting for the bulls, from the July 17th high of 118.35 down to that 7-month low. While today’s 3-week high marked a good bounce, is $8.00 just a breather in the down-trend, or is there more to go?
Tuesday’s action as well as some fresh news in the cash market should give us some better indication as to the next leg.
Hedgers: On a 3-week bounce, consider protecting the 86.00 level for the next 167 days for $3.00/cwt.
Have a great and safe holiday weekend!
CER