4/17/24

     Not much price action today in the Livestock Markets, but the Grains continue to whip around. Today June'24 Live Cattle were 40 cents lower and settled at 175.32 ½. Today's high was 176.10 and the 1-month high is 186.32 ½. Today's low was 174.37 ½ and the 1-month low is 170.25. Since 3/15 June'24 Live Cattle are 8.40 lower or just over 4 ½%. The Feeders were lower as well. May'24 Feeder Cattle were 70 cents lower and settled at 240.27 ½. Today's high was 241.50 and the 1-month high is 260.60. Today's low was 239.40 and the 1- month low is 232.62 ½. Since 3/15 May'24 Feeder Cattle are 15.50 lower or just over 6%. The Hogs dropped a dime today. June'24 Lean Hogs were 10 cents lower today and settled at 102.72 ½. Today's high was 103.55 and the 1-month high is 109.65. Today's low was 102.27 ½ and the 1-month low is 98.62 ½. Since 3/15 June'24 Lean Hogs are 7 ½ cents higher or 0.07%. The Livestock Markets stayed in a tight range today, and they all settled in the middle of today's trading range. There is a Cattle on Feed Report this Friday, and I am sure it's no surprise, I expect a Bearish Report. I feel there is still room to head lower. I believe the report will show the Feed Yards are still full and weights are even higher. I expect weights to be over 30 pounds heavier than last year. The longer time on feed, generally good weather, and with feed prices dropping, has produced some heavy Cattle. These heavy weights have flooded the market with beef over the last two weeks and exceeded last year's amount over the same time period. I have seen early estimates for the Cattle on Feed Report, and it showed the April 1st Cattle on feed herd 2% higher than last year. Placements expected to be 8% below last year, and marketings down 11% from last year. Tomorrow my downside targets in June'24 Live Cattle are 173.50 and then 170.25. For May'24 Feeder Cattle my downside targets are 239.38 ½ and then 232.62 ½. For June'24 Lean Hogs my downside targets are 101.21 and then 100.36 and if it breaks from there then 98.62. 

     July'24 Soybeans were 4 cents higher today and settled at 1164. Today's high was 1169 ½ and the 1-month high is 1240. Today's low was 1156 ¾ and that's also the new 1-month low. The 52-week low is 1140 ½. Since 3/15 July'24 Soybeans are 48 ¼ cents lower or almost 4%. The Corn was a little lower today. July'24 Corn was 1 ¾ cents lower today and settled at 441. Today's high was 444 ¼ and the 1-month high is 460. Today's low was 440 ¾ and the 1-month low is 438 ½. Since 3/15 July'24 Corn is 8 cents lower or almost 2%. The Wheat slipped lower today. July'24 Wheat was 12 ½ cents lower and settled at 552 ¼. Today's high was 570 and the 1-month high is 588 ¾. Today's low was 551 and the 1-month low is 542 ½. Since 3/15 July'24 Wheat is 8 ¼ cents higher or just above 1 ½%. I was Bullish next year's Soybean crop this morning, but then I read about Embrapa, Brazil's ag Research Service, and they said that up to 70 million acres of degraded farmland could be converted to crop production over time. No timeline was mentioned. That would be a 35% increase in crop area, compared to this year. Conanb just raised its Soybean estimates for Brazil to 146 ½, up from 145, and there was another estimate raised to 147 yesterday, both changes heading toward the USDA number of 155mmt. I expect more acres of Soybeans will have been planted then were expected or reported, and the yields to be high as well. Take a look at the open interest in May'24 and July'24 Soybean puts. In the May'24 1100 Puts the open interest continues to grow and is above 13,500 contracts. In the July'24 1100 Puts the open interest is also above 13,000 contracts and rising. There is more open interest in those two strikes compared to any other Call or Put strike in May'24 or July'24. I believe the Beans will break just before May'24 Option expiration, on April 26th or during the following week before May 3rd. My downside targets tomorrow for July'24 Soybeans are 1150 ½ and 1144 ¾, and then the 52-week low of 1140 ½. The 52-week low in May'24 Soybeans is 1128 ½. The Corn in South America could have a problem. There is a Corn stunting disease outbreak in Argentina. The Buenos Aries and Rosario Grain Exchanges lowered their Corn estimates to 49.5 and 50mmt because of the Corn stunting disease., which can cut yields by 30% Cordonnier said. He also cut his estimates by 3mmt to 50mmt. The crop is already rated very poor - to fair, and only 15% harvested. Brazil had the same disease in Spring but has rebounded. However, Cordonnier said yield projections could decline in the future. My only downside target in July'24 Corn is 438 ½, and the upside targets are 446 ½ and 452 ¼. The Wheat Market was down 12 ½ cents today and who knows what it will do tomorrow. If there is a Big problem somewhere in the word, then the Wheat Market can go through the roof, however the crop looks good right now. My downside targets for July'24 Wheat are 542 ½ and 537 ¾. My upside targets are 565 ½ and then 585. 

Bill

312-957-8079

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Bill Allen

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ballen@walshtrading.com

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