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March 3, 2025
In my mind, last week’s market and today’s beginning
have raised the probability up to 90% that the Feeder market has begun its
crash. And yes, that’s an arbitrary number on my part, but I cannot look at the recent SHARP drop in Live
Cattle cash and futures prices and view it as anything less than totally
devastating to ANYONE in the Feeder Cattle business…My
prediction remains that the majority of Feeder Cattle Operators…who are
already hemorrhaging losses…are about to absolutely DISAPPEAR as buyers,
which I believe WILL
LEAD TO THE SAME 2O% RELATIVELY STRAIGHT DOWN MOVE THAT FEEDERS HAVE MADE, TIME
AFTER TIME, GOING BACK FOR DECADES.
I am going to again show you all of the Feeder Cattle
tops for the past 50 years because they ARE A RECURRING SORT OF ROADMAP FOR
THE WAY THIS MARKET DOES GO DOWN…And suggest that you note
that (1), they frequently just go from bullish to bearish from one
unnoticeable day to the next, and (2), they DO average about a 20% decline
within a matter of weeks or a few months, and (3), a 20% decline from
current RECORD HIGH PRICES does translate into about 55 cents or $27,500
per futures contract.
I KNOW YOU’VE SEEN THESE ALREADY BUT DO TAKE THE TIME TO
OBSERVE HOW THEY START AND HOW THEY DO GO DOWN.
Note the percentage size of the declines…and how long it
took to do so…
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Why Feeder Cattle owners
are starting to lose a monster amount of money….
What you see below in the August 2025 Live Cattle
contract IS a major reversal. The
important thing here is that if you bought actual Feeder Steers in January,
to just breakeven after fattening them out into August, you
probably need , to be able to sell them at close to $2.00 a pound…again,
JUST TO BREAK EVEN...And with August already more than 13 cents under that
at $1.87...and with the distinct possibility of it dropping 10-15 cents
more…I will tell you that FEEDER CATTLE OWNERS ARE IN BIG TROUBLE…and undoubtedly, some
strong percentage among them will NOT BE BACK AS BUYERS AGAIN…which does
set the stage for a market that is HEAVY on Sellers, and close to
NON-EXISTENT buyers.
Here is the big picture…that, to me, just screams that
anyone who is long, or buying, up here…or really anywhere even near here…is
going to lose a LOT of money.
Here’s one option I like here…
Or this…
Do KNOW this…More than likely, somewhere in
here…and I mean ANY DAY NOW…I think we are going see a couple of BIG days
that take the market HARD away from this recent high…thus making it
more difficult for anyone who was THINKING about getting short. In other
works, drop this thing 9 cents in two days and it DOES make it feel riskier
to get short…and it DOES mean people getting left on the sidelines, waiting
“for the next bounce to get on,” and it never does. That’s for real guys.
GET ON THIS. There are now more than ample reasons to
substantiate my case…The nail IS in the coffin. And it does not mean
I’ve got it right here but I honestly don’t think
many trades ever get any bigger than this.
I’m headed down to a Cattle auction in south Georgia tomorrow but my phones, texts and emails
will be forwarding to me…So I will be getting them…but depending on the
circumstances, I might be a bit slow in getting back to you.
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
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