Tuesday December 12, 2023
GRAINS:
In a single day grain information is quiet. The so referred to as “drought” in Brazil has been grossly over-billed. They’re nonetheless prone to harvest a file massive soybean crop. The crop will probably be overdue and yield could also be down however because of expanded acreage, the scale will probably be large. Brazil is a monster. Corn manufacturing would possibly endure some actual losses if the second one crop sees diminished acreage. I’m bullish corn however I’m recommending edging out of the bullish soybean 3 method, taking a small loss. Particular main points are within the night time twine.
LEAN HOGS:
I’ll stay digging however I’ve by no means heard why final week’s kill was once revised down via 13k. I’ve by no means heard why the day before today’s kill got here in additional than 20k not up to anticipated. Margins advanced they usually’re extremely successful. The cutout was once up .95 with money down $2.00. There was once no significant task in choices the day before today. Lean hog open pastime was once down 1,185 automobiles. IMO, futures are probing the low finish of the variability and futures will most probably cling and sooner or later roar upper. I’m reckoning on cast proof of herd liquidation and on bettering call for for U.S. red meat each at the home entrance and on the export entrance. For nowadays, I like to recommend purchasing Feb calls. We personal the Dec 70 calls (purchased at 15 issues) which expire Thursday.
- Purchase Feb LH 72 calls at 140 issues, risking 70 issues.
LIVE CATTLE:
LC closed upper for 2 consecutive days for the primary time since Nov 20 or so I’m instructed as I didn’t take time to investigate the chart. I knew it have been a very long time. Open pastime edged decrease, down 1,217 automobiles. There was once not anything particular within the choices business that I may just see. The display checklist is up 10k in TX however down 2k in KS and down 21k in NE. FC noticed any other high-volume buying and selling consultation greater than 20k as opposed to the full open pastime this is simply north of 50k. Loopy. Bellies with 4 legs. I want to see a detailed in Jan FC above final week’s excessive to persuade me of a long-lasting low. The day past’s shut in Feb LC, neatly above 16670, tells me that LC futures have put within the December seasonal low. I’m bullish. We’re conserving a bullish three-way possibility reversal in Oct LC choices and final week we added a choice unfold in Apr. If futures chop a few classes, I’ll glance to shop for some Feb calls outright risking about part of the top rate paid. Placements at the on-feed file that comes out one week from Friday may well be down up to ten %. Sure, it sounds as if that the large liquidation in LC and FC futures could also be historical past. The secret is within the red meat. This was once mentioned the day before today at duration.
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