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September 25, 2025
More evidence of a top…
And the potential for a crash…
Farming is a massive speculation every year…With row
crops, it’s beginning with what to plant and how much, then dealing with
what Mother Nature throws at you, and finally, what prices will be like
when you’re ready to sell…But in the agricultural sector, the “crop” that I
absolutely consider to be THE biggest speculation is unquestionably the FEEDER
CATTLE market.
Why? Because, for one thing, there are God knows how
many “cattlemen” and entities that shell out big bucks to buy truckloads of
young steers (currently about
$180,000 a load for 45-50 steers) that get placed in feedlots to be
boarded, fed and fattened up for the next 200 days…without those
“cattlemen” EVER seeing those cattle at ANY stage of their
investment…literally from the day they buy them to when they leave the
feedlots, six months later, heading for the slaughterhouse.
Obviously, there are 1000’s of farmers who do actually
“raise cattle,” but believe me, there is a ton of money that has been
making this bet both in the feed lots and in the futures markets…and yes it
has paid off…but INEVITABLY, at some point the balloon pops, and the result
will be a classic futures, and real world, market DISASTER.
Here is one example that VERY MUCH reminds me of the
Cattle Complex right now…
And don’t think that’s some isolated example…This shit
DOES happen all the time in the markets…
And here’s (again) the evidence that there is a TON of
money long the Feeders right now…
So, OK, you can think, “He’s been saying that forever
and been DEAD wrong,” which is TRUE, but it also has nothing to do with
what comes next here. This is not the first time I’ve had a big, big
miss…that was then followed by exactly the opposite…HITTING IT BIG. And per
recent market action and the “evidence” following, I DO think we are there…that the
TOP HAS BEEN MADE.
FACT: The top tick
occurred a month ago several days after a bullish "Cattle
on Feed" report...which was followed by a 20 cent
decline. We then had another bullish COF last Friday, which rallied the
market hard on Monday, but I ended there and we
are now back below last Friday's close. If you then throw in that, besides
all the “smallest herd in 75 years” hype, the Screwworm story has also been
everywhere in the press, with both themes supposedly being extremely
bullish for Cattle, you’d think both Cattle contracts would be screaming
higher, but the truth is, they are both seriously leaning towards the
downside.
The FACT is, in spite of nothing but bullish Cattle on
Feeder reports…and ongoing hype about Screw Worm, THIS MARKET MADE ITS HIGHS A MONTH AGO…and
that IS significant. I’ve said it before, JUST ABOUT EVERY BULL MARKET IN
HISTORY HAS NOTHING BUT BULLISH NEWS AT THE HIGHS…and when the market
reaction to bullish news is the OPPOSITE of bullish, you’d better be
getting short.
I don’t care how wrong I
have been, I see this trade as one of the best I have ever seen. Period.
Period. Period.
Also to say that you can also consider further out of
the money options here, which are obviously cheaper, with the idea being
that if I am right…that if we do get anything close to the size and
velocity of movement I am expecting, just about any reasonable put you buy
should multiply by many times its purchased value…And it goes without
saying, if I am wrong you can lose every dollar you put on the table.
In your court…I’d also add that if my research, work and
opinions influences you to take any of the trades
I recommend, doing them here would obviously be appreciated.
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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