Monday February 26, 2024
GRAINS:
No backside in sight. The COT record confirmed that budget added greater than 26,000 quick corn positions they usually’re preserving a document massive quick place this is north of 340,000 contracts. Price range added 2,000 soy shorts they usually’re now quick 136,000 soy contracts. The charts had been destroyed. Will a backside be shaped simply forward of or simply after FND? In all probability. I’ll entertain the theory of shopping for some calls however I received’t be making a bet the farm. It will be standard and seasonal for a backside to be shaped quickly. Keep tuned. We harvested all successful bearish positions final week. My long-term problem goal of $4.00 has been reached.
LEAN HOGS:
Open pastime in lean hogs used to be up 2,215 on Friday. Price range proceed to pour into new period within the hog marketplace. The COT record showed that budget added greater than 14,000 contracts in the newest week they usually’re now preserving greater than 48,000 longs. The budget are on-board the fashion they usually’re in for the lengthy haul. The calls I need to purchase, the Apr 88 calls settled at 197 Friday. I like to recommend liquidating all final 86 calls early as of late. I’m anticipating some form of pullback. If a damage by no means occurs, we nonetheless personal the 84/90 name spreads. Chinese language government introduced that their sow herd stood at 40.67 million on Feb 1, down 6.9% from final yr. Additionally they reported that hog slaughter right through Jan surged via 28.6% vs final yr. It sort of feels they’re nonetheless liquidating aggressively. Closing week’s hog kill used to be somewhat over the early week projection, however weights are shedding. I contend we’re experiencing two transferring key variables. Call for has higher and, IMO, there’s been an overcount in hog numbers.
- Liquidate all final Apr 86 calls at the open as of late.
- Purchase Apr LH 88 calls at 120 issues ($480). (not anything achieved)
LIVE CATTLE:
First off, open pastime on Friday’s LC industry used to be up 3,227. Price range are including to their period. The COT record showed that budget added 8,000 contracts in the newest week, they usually now cling over 50,000 lengthy positions. The height of fund period from final Sep used to be simply north of 130,000 automobiles. The basics for as of late’s marketplace are the FACT that packers paid as much as personal livestock final week. I’ve the negotiated quantity at 41.6k with packers blinking first and doing so forward of the on-feed record. The second one key variable is that the on-feed record used to be bullish and now not bearish as maximum consider. The record confirmed the biggest decline in 0n-feed stock for January going again to 2013. Sure, the on-feed math is converting temporarily as I advised that it will. As well as, selection red meat has moved north of $300. IMO, it received’t industry again beneath $300, for any period of time, for months and perhaps years. The historical slide in corn costs may be very bullish towards feeders. Via the best way, Mar feeders are poised to check and most probably penetrate my first measuring goal of 255 as of late. Does this imply the transfer is over? Completely now not. Keep bullish. On weak point as of late, upload to the deep out of the cash Aug and Dec calls. My subsequent play might be purchasing June futures with a posted promote forestall.
- Purchase Aug LC 205 calls at 30 issues ($120). (load the boat) (crammed)
- Purchase Dec LC 230 calls at 20 issues ($80). (load the boat) (crammed)
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