Monday December 18, 2023
GRAINS:
In a single day information within the grain advanced is quiet, vacation sort quiet. The Nov weigh down used to be higher than anticipated and file prime. This may occasionally proceed as extra U.S. weigh down crops come on-line in 2024. Meals for idea is equipped via the dedication of dealer record. Finances were masking shorts in corn and wheat however they nonetheless cling huge quick positions. As of final Tuesday, finances had been quick over 150k corn contracts and quick about 70k wheat. I think endured quick masking will underpin each corn and wheat futures. I proceed to look studies projecting greater soy acres on the expense of corn acreage subsequent spring. This may occasionally additionally underpin corn futures. In the end, expectancies that the Brazil 2d corn crop will fall quick because of diminished acreage is a supportive issue. The corn chart seems to be etching out a head and shoulders backside formation. I’m bullish corn. Corn exports are bettering.
LEAN HOGS:
OK, Friday’s surge upper in lean hog futures came about on quick masking. Overall open passion fell 1,860 vehicles with Feb dropping just about 3,100. Task in hog choices is expanding with Feb calls up 2,093 and that includes the 78 calls however Feb places had been upper in open passion via 3,242. Apr LH calls had been up 1,569 and featured the 86 calls. Investors proceed so as to add deep out of the cash summer time places for ASF tournament coverage. We effectively offered a portion of our Feb 72 requires 290 issues Friday (bought early final week at 140). Dangle the remaining. The finances are nonetheless quick greater than 18,000 hog contracts. Feb has dialed in a ton of bearish information, in all probability too a lot. Will the approaching hog & pig be bullish. Sow slaughter has been increased since early final summer time. Industry estimates must be launched quickly. The record is due out Friday at 2:00. Some say that prop 12 is accountable for depleting frozen shares. Possibly. However resources point out that beef intake in CA is off bigtime because of upper costs. That is as designed. Regulation similar to prop 12 is no longer designed for the wellbeing of animals, it’s designed to scale back meat intake to battle local weather alternate. It’s a left-wing schedule. Someone that doesn’t notice this has their head within the sand. I’m bullish however for me to stay bullish I should see significant contraction at the hog & pig record.
LIVE CATTLE:
Rain, rain, rain. Grass, grass, grass. Wheat, wheat, wheat. Check out the 6 to 10-day forecast. Heavy rain is forecast for the S. Plains. My long-term climate guys are projecting a heat/rainy iciness adopted via a rainy spring within the Nice Plains. With iciness wheat in nice form this portends gentle placements within the months forward. Certainly, if Nov placements are decrease then I think Dec placements can be decrease. With superb wheat for grazing, placements shall be decrease in Jan and Feb. Get the image? Money bids within the south on Friday went from 167 to 170 with some business beginning at 170 at cutoff time. Industry within the north used to be established at 167-168 previous within the week. However crucial building final week used to be two-fold. First, packer margins are successful and 2d, they adjusted the Sat kill upper leading to a weekly slaughter of 649k. This fits the most important kill of the yr and it used to be up 4.5% from final yr. Finances are lengthy simplest 22,700 vehicles. At their height final fall they had been lengthy greater than 130k. Packers will most probably cross for every other huge kill this week forward of the vacation disruptions. They’re earning profits! We sprinkled our duration across the pie. We’re lengthy Feb 176 calls, we’re maintaining Apr name spreads and we’re maintaining bullish three-way chance reversals in Oct LC choices. The most productive position so as to add at this second is in Oct futures and/or choices, IMO. I’m bullish.
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