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March 8, 2026
My very strong opinion:
A VACUUM of Feeder Cattle buyers
is dead ahead…
I was already bearish Cattle…and obviously I might be dead
wrong…but recent
events have made me even more expectant of an OUTRIGHT CRASH in this market…and
particularly in Feeder Cattle.
Unless Feeder steers bought in the last 5-6 months have been
100% hedged (both the cattle and their feed costs) the odds are pretty high
that those animals are already losing money on paper, and will be losing real
money as they are actually sold during the next 2-4 months…with their ONLY
possible saving grace being IF Live Cattle prices miraculously turn up from
here and trade back up beyond what are already the highest prices in history.
The bare truth is, last fall, when Feeder prices were
screaming higher, the entire cattle industry was so bullishly giddy with “the
smallest herd in history” and “screwworms from Mexico” that people were willing
to buy steers to put in feedlots AT ANY PRICE…no matter how high and with
seemingly zero regard for the FACT that Cattle prices HAD to keep heading even
further into record territory just to avoid losing money on the animals…much
less to actually show a profit. And as for hedging? After 46 years observing
human behavior regarding the markets, I will tell you that when EVERYTHING that
is being printed and said about a market is nothing but wildly bullish, the
overwhelming majority of people who SHOULD hedge, DON’T hedge…and you’d better
believe that, in this case, and having talked to a number of cattle guys in
that boat, it was exactly the same on this go round…In other words, the masses did
NOT hedge…and going strictly by the numbers, anyone who isn’t hedged, IS
already in the red on every animal they own…AND…they still have cash-outflow
months to go before they can sell them.
In reality, all those cattle owners were already in trouble
a week ago…but TRUMP’S WAR WITH IRAN has unquestionably DRAMATICALLY worsened
the situation.
#1 - With grocery prices already prohibitively high for the
consumer…with beef being at the top of the “too expensive” list…this week’s 80
cent a gallon (so far) surge in gasoline prices (not to mention other energy
bills) is certainly NOT going to result in increased demand at the meat
counter. FAR from it…and NOT a positive for cattle prices themselves.
#2 Grains are the primary feed given to Cattle in feedlots,
with that feed representing roughly 60-65% of the total cost of fattening those
steers over the course of the 6 months it takes to get them up to slaughter
weight…When the price of that feed goes up, it obviously can translate into
smaller profits…on both Feeders that are already on feed AND those that might
be bought in the future. And as I have been predicting, a strong upside move in Feed Prices what was already beginning to happen…and
is now being accelerated by the War as well.
With Cattle owners
already losing money, this increase in costs is NOT going to encourage more
Feeder Cattle buying. Again…quite the opposite.
#3 - On Friday, it was reported that the economy lost 92,000 jobs, and in
fact, since last fall 3 of the past 5 monthly reports have shown job losses.
This is NOT a positive for the financial health of the spending public…and with
roughly 62% of American’s being invested in the stock market, which I continue
to believe is beginning to seriously fail, therein sucking money (potentially a
LOT) out of their pockets, the argument for declining beef demand certainly
becomes stronger.
It’s not just the war, and
oil anxiety, and losing jobs…It all comes back to that speculation is rampant
everywhere and everybody is long up to their limits…And the next phase in this
perpetual GAME is everybody getting out…SELLING.
I don't write this newsletter
just to entice people to trade with me. What I am always showing you is exactly
what I am personally thinking and positioning for in the markets...And what you
see below IS what I think is coming. It goes without saying that I may be dead
wrong, which could mean losing every dollar you invest, but I DO THINK WE'RE
ABOUT TO SEE A $1.00 FAIRLY STRAIGHT DOWN COLLAPSE.
Here are couple of ways to do this…
With the current environment, prices may be quite different
by the time Cattle open at 9:30 EST tomorrow.
Call anytime if you want to talk about this or any of my
other current recommendations.
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, Stock Indices