Pure Hedge - Livestock and Grain
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The Livestock Markets had a strong week, and I doubt we will see that continue next week, after the Bearish Cattle on Feed Report today. February'25 Live Cattle were 77 ½ cents higher today and settled at 188.20. Today's high was 189.05 and the 1-month high is 190.32 ½. Today's low was 187.37 ½ and the 1-month low is 184.40. Since 10/22 February'25 Live Cattle are 62 ½ cents lower or almost 1/2 %. The Feeders ran higher again today. January'25 Feeder Cattle were 85 cents higher today and settled at 254.30. Today's high was 255.37 ½ and that is the new 1-month high as well. Today's low was 253.15 and the 1-month low is 239.50. Since 10/22 January'25 Feeder Cattle are 8.25 higher or almost 3 1/2 %. The Hogs were higher as well today. February'25 Lean Hogs were 1.02 ½ higher today and settled at 85.67 ½. Today's high was 85.75 and the 1-month and 52-week high is 86.90. Today's low was 84.20 and the 1-month low is 82.10. Since 10/22 February'25 Lean Hogs are 2.87 ½ higher or almost 3 ½%. The Cattle on Feed Report was released today and it showed 100.3% on Feed with an estimate of 99.9%, and a total of almost 12 million Head on Feed. Placements were 105.3% with an estimate of 103.8% and was the largest October Placement number since 2019. Marketings were 104.7% with an estimate of 105.2%. I think the Fats and the Feeders are both overextended after this week. The February'25 Fats gained $2.90 this week and the January'25 Feeders were up $7.07 ½ for the week. The February'25 Hogs were up $2.77 ½ for the week as well. It was good to see the placement number as high as I had expected to be, and I think we will see some retracement next week. I feel we will see the February'25 Fats head back toward the 100-Day moving average of 184.58, the 50% retracement from the 52-week high/low of 184.48, and the 1-month low of 184.40. I feel we will see the January'25 Feeders Head toward the 200-Day moving average of 250.22 and then test the 250 level. If it can push through the 250 level, I think it can trade back down to and through the 50% retracement from the 52-week high/low of 247.61. The 100-Day moving average is 242.20 as well. The Hogs look elevated as well, and I think we could see a pull back to the 82.00 level. The 1-month low is 82.10 and the 50-Day moving average is 81.79. More than 165,000 pounds of fresh and frozen ground beef have been recalled due to possible E coli contamination, according to the Agricultural Dept's Food Safety and Inspection Service. The ground beef was distributed Nationwide, and there is a concern that some of the ground beef could be in restaurant refrigerators or freezers. Wolverine Packing Company shipped the ground beef and has recalled all of it containing the number EST.2574B in the USDA inspection mark. The US Dollar Index continues to surge, and if that continues, it will eventually weigh on the Cattle Markets as well.
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The Beans have spilled well below the $10.00 level, and are probably heading lower, even after today's gains. January'25 Soybeans were 5 ¾ cents higher today and settled at 983 ½. Today's high was 985 ¼ and the 1-month high is 1044. Today's low was 975 ¼ and that is a new 1-month low as well. Since 10/22 January'25 Soybeans are 17 cents lower or almost 2%. The Corn Market lost a little today. March'25 Corn was 1 cent lower today and settled at 435 ¼. Today's high was 439 and the 1-month high is 447. Today's low was 434 ½ and the 1-month low is 423 ¼. Since 10/22 March'25 Corn is 6 cents higher or almost 2%. The Wheat Market was lower today. March'25 Wheat was 4 ¾ cents lower today and settled at 564 ¾. Today's high was 571 ¼ and the 1-month high is 604 ¾. Today's low was 562 ½ and the 1-month low is 546 ¼. Since 10/22 March'25 Wheat is 31 ½ cents lower or more than 5%. Cordonnier raised his Brazilian Soybean crop estimate by 1mmt to 166mmt. He left his Corn crop estimates the same at 125mmt. In Argentina he kept his Soybean and Corn estimates the same at 57mmt and 48mmt respectively. The International Grain Council cut its Global Wheat production estimate by 2mmt to 419mmt, but that is still 23mmt more than in 2023/2024. They also increased their Global Corn production estimates by 1mmt to 1.22bmt but would still be a decrease of 6mmt from 2023/2024. China has imported more than 540,000mt of Soybeans from the US in October, but they also imported more than 5.50mmt from Brazil in October as well. China has imported more than 90mmt of Soybeans through October and more than 67mmt were from Brazil. That is an increase of almost 14% from Brazil over last year, and Purchases from the US over the same time period were down almost 13% at 15mmt. Ukraine plans on planting more Wheat and Corn acres and fewer Soybean acres next year as well. The weather in Brazil still looks good, and the soybean crop will be big. There is not any reason for the Beans to rally right now. The Corn Market still looks strong as a whole, and we could see prices continue higher for a little longer. The Wheat obviously does whatever it wants, but there could be another rally if there is more conflict in the Black Sea Region, or anywhere else.
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Cattle on Feed Repot Below
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Today's Brazil Weather Radar Map Below
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-Bill
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