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Futures and options trading involve significant risk of loss
and may not be suitable for everyone. Only risk capital should be used when investing in
the markets. Therefore, carefully consider whether such trading is suitable for
you in light of your financial condition. The opinions and viewpoints
discussed herein are entirely my own. No
representation is being made that a specific strategy or discipline will
guarantee success or profits. Fundamental factors, seasonal and
weather trends, and current events may have already been factored into the
markets. Past performance is not necessarily indicative of future
results. The data contained herein is believed to be drawn from reliable
sources; however, individuals acting on this information alone are responsible
for their own actions. This material is, or is in the
nature of, a solicitation.
This newsletter is my sales tool. If you like my ideas
and want to act on them, I would obviously appreciate
having some of your trading done here with me.
For more info or consultation…
Landline 770-425-7241
Cell 770-366-3070
Also…If you would like to
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Thanks…Bill Rhyne
August 17, 2026
Bill’s Cattle Thing…?
Yup!
The focus here is on the Cattle market, but I’ll start by
presenting this chart again of the recent action in Silver, just to remind you
that how the markets move is NOT necessarily based on some logical
fundamental analysis that can calculate X + Y = some specific value or price
that a market “should” have. I mean, really, I defy you to logically
connect all (or even one) of the swings shown here, since last November, to any
specific event or underlying fundamental reasoning…And having spent 60% of my
lifetime on the front line of the commodity markets, I’ll swear on as many
bibles as you want that this is just ONE example among 1000’s that definitively
infers that 90% of what happens in this shit is mostly a function of investors,
speculators and traders getting IN…more often than not chasing media hyped
ideas…and then getting OUT…while running for the exits with losses.
TELL ME HOW THIS COULD POSSIBLY BE CONNECTED TO ANYTHING IN
THE REAL WORLD.
How does this have anything to do with the Cattle market
today?
For well over a year, everything you needed to know about
cattle prices can be summed up in one “fundamentally” based MANTRA that that has been unanimously and
repeatedly cited by just about anyone who has ever even seen a cow: “It’s The Smallest Herd in 75 years!” And ok,
that’s true, and cattlemen everywhere will just think, “This guy is stupid,”
but I’m going to tell you that TODAY this well known
fact does NOT matter. What you need to understand is that this historical fact
is certainly part of the reason why Feeder prices HAVE risen about 350% in the
past 5 years (again, seen any houses do that? Or cars? Or crops?), but this
information, by now, almost just as certainly has already been “priced into the market.” And then
understand that these incredibly high and long sustained prices DID
result in a widespread cattle market “euphoria” earlier this year that led to
just about EVERYBODY in the industry buying every calf and steer in sight, at
ANY price, with them all believing…per those low, low numbers and the
whole thing about “rebuilding the herd” also supposedly being bullish…that
“cattle will be good for at least the next few years.”
But
the fact is, anyone who bought ONE steer for the feedlot at $3.60 (the LOWEST
price since January 1st) at any time during the past 6 months, right
now, already stands to lose roughly $300 PER ANIMAL. And the truth
is, they have only been that low twice this year, with the bulk of the time,
prices having been easily averaging $3.70. And that $300 LOSS, PER STEER,
does not take into account that there are 1000’s of
cattle loads out there that can’t be sold for another 2-3 or 4 months…meaning,
while those losses might lessen…they can also get a LOT worse.
I keep saying it, because it IS a function of normal human
behavior when the losses are mounting, at some point (already here I think) new
or returning Feeder Cattle buyers are just going to disappear…and prices will
do what they have done in just about every Cattle bear market for the past 50
years…which is GO RELATIVELY STRAIGHT DOWN.
I’ve shown you these before, but
have another look at these 50 years of Feeder Cattle histories which are
EVIDENCE OF HOW FEEDERS DO GO DOWN…And
believe me, in EVERY one of these cases, some sort of bullish story was out
there at the market top…and then was kept alive ALL THE WAY DOWN…which is no
mystery. That’s how this GAME works.
These are “close only” charts…Note the percentage
size of the declines…and how long it took to do so…And ALSO that
in many cases, how often there are lengthy strings of lower closes with very
few upticks (higher closes).
FEEDER CATTLE DECLINES SINCE
1974
And here’s what they look like today…
And this IS the real world…
THE LONG TERM CHART
Book this: In late June,
NOBODY that was buying Feeders...again, and doing so at any price...had ANY
idea that Cash Live Cattle Prices were about to have their BIGGEST ONE MONTH DECLINE IN HISTORY...and basically, almost
overnight, present them with losses on every Feeder they had bought this year.
You'd better believe that if they'd known prices would be 30 cents lower in by
late July, I can only think that some big percentage of them would have backed
off…But NOBODY did…and they are now all underwater…
Here is one put option I like right here…
There are all sorts of way to do this…Including futures, or
further out of the money options, or with more time on the options, etc…The important thing, I believe, is to place the
bet, define your risk…and if it’s working, more or less forget you are short
and ride it all the way to expiration.
I honestly wish I was not here watching this every day…
Call if you’re interested…Like I said, there are any number
of ways to go about doing this…
Thanks,
Bill
Now on X - @CrokerRhyneCo
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