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February 15, 2025
I’ve written this on a
Saturday because I do think that the move I have been looking for,
following this holiday weekend, is about to shift into a high downside
gear.
The Cattle Market Slow Motion (so far)
DISASTER IS JUST GETTING STARTED
Three
weeks ago, everybody in the Cattle industry was deliriously happy as CASH
Slaughter Weight Cattle prices were soaring, leading them all to presuppose
that “the smallest herd since 1961” was still a blind assurance that meat
prices would be staying high…And this CASH MARKET induced euphoria…this
expectation that “prices just CAN’T go down right now”…in recent months has
led to giddy cattlemen having paid dangerously high prices for Feeders,
those prices being so high that the ONLY way they could make money was if
these record high prices KEPT going higher…AND GOD FORBID IF PRICES SHOULD
ACTUALLY START FALLING.
I wrote it then and I’ll repeat it now: THE CASH
MARKET HAS ABSOLUTELY NOTHING TO DO WITH WHERE PRICES WILL BE IN THE
FUTURE, and that making cattle buying or cattle raising decisions
based on today’s cash market might work some of the time…but sooner or
later…it absolutely WILL NOT…and when it doesn’t work, especially when
you’re at the highest prices in history, it CAN turn into an ABSOLUTE
DISASTER…and that IS what I think a whole bunch of Cattle people are now
facing.
START WITH THIS…
And then this…
So here’s the point…
I've documented it for months...that when Feeders do roll over,
they DO typically get hit for 15-20% in a matter of weeks or months, mostly
as a function of the fact that when Feeder buyers, already on the hook for
5-6 months, start losing money, they DO tend to just "disappear"
until prices get SUBSTANTIALLY LOWER...And I DO think WE
HAVE JUST BARELY STARTED THIS PROCESS. I'm not dreaming. What I've drawn
below IS the way they can trade and this IS what I
am personally looking for.
The cash market has peaked?
And here is the big picture…which just SCREAMS “Get
Short!!!” to me…
This is NOT a “wait and see” situation. If you ever
short any market (and some people never do), I honestly do not think you
will ever get a better set up than this…But if ARE thinking about doing
something, I strongly suggest you get it done…I don’t just keep writing it:
When they turn, they DO usually just go straight down…and yeah, they do it
in a big, fast way.
DO something.
Thanks,
Bill
770-425-7241
866-578-1001
All
option prices in this newsletter include all fees and commissions. All
charts, unless otherwise noted, are by Aspen Graphics and CRB.
FUTURES
TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE
SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE
FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE
WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own
account and has a financial interest in the following derivative products
mentioned within: Feeder Cattle, Live Cattle
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