Pure Hedge - Livestock and Grain

9/3/26

I feel today was a huge selling opportunity in the Cattle Markets. I am still looking for the October'26 Feeder Cattle to trade down to the 306.00 level, and or lower. I do not believe the Cattle Markets have found a bottom yet. I would recommend selling into any market strength from here, until a bottom is found. Palm Oil rallied yesterday on fears the El Nino weather pattern could get stronger, bringing even drier conditions to the India, Indonesia, Thailand, and Malysia region. This region is where all of the Palm Oil and a large percentage of Sugar is produced. Production of Palm Oil in Indonesia is already predicted to drop almost 3% this year, just as they are still implementing their B50 Biofuel mandate over the last couple of months, and they have recently decided to stay with the B50 Biofuel mandate for next year as well. Refiners in India imported a record amount of Soybean Oil last month and the most Palm Oil over the last six-month timeframe. Sugar #11 made a new contract high yesterday, as the realization India might not have enough sugar surfaced. I said early this year that there could be export controls put on the sugar in India late this year, and that is closer to happening. There could be significant crop damage and yield decline in Southern Asia, pertaining to the Oilseed, Palm Oil, and Sugar crops due to the lack of the monsoon rains. There are potential problems continuing to exit with the Brazilian Sugar harvest as well. I do not care about the pullback in the Sugar #11 market today, after making new contract highs yesterday. Today was a buying opportunity in the Sugar #11 and Soybean Oil Markets. The fourth quarter of this year is setting up to be very special. Everything points to a supply and demand problem for vegetable oils worldwide. I recommend stepping up and getting long both the Soybean Oil and Sugar #11 Contracts in the Option Markets now, especially after today's price action gift. Give me a call if you have any questions. Have a great night. 

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9/1/26

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The Cattle Markets are dancing around the 315.00 level in the October'26 Feeder Cattle, and I feel that will need to change before any rally can occur. I feel the October'26 Feeders need to break another 10-30 dollars, before a real bottom can be found, and there is not much of a chance of a rally to occur until that bottom is found, in my opinion. I am still waiting for it to pull back to 306.00 in the October'26 Feeders. If or when it does, I will start to get long in the Option Market and would continue to buy it down to 286.00. The Soybean Oil has taken off, and it still looks great moving forward. There is a supply and demand problem, that will be seen in the fourth quarter of the year. The rally to date, is based off of US crop conditions, and Biofuel. I have been Bullish for a while, and those reasons have not even entered the market yet. The Sugar #11 has soared as well, and I see that continuing. Today, the March'27 Sugar #11 contract settled at 19.33 and think there is a chance it could trade up to 30.00. There is a sugar chart below. I would like to work with you, and there is plenty of year left to make a big difference in you bottom line. Give me a call and I will answer all of your questions, and if you are not interested after we speak, I will not call you again. It was a busy day, and I will be ready to go again the morning. I like the same markets, for the same reasons, and if you would like to know more, simply give me a call. Have a great night. 

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I feel we could see the March'27 Sugar #11 trade up to $30.00. There are no daily limits in the Sugar #11 Contract*. 

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TODAY'S 20-YEAR MARCH'27 SUGAR #11 CHART BELOW

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8/27/26

The Livestock and Grain Markets are moving, and I don't think we have seen anything yet. The rest of this year and especially the 4th quarter could end up being one for the books… Starting with the Cattle Markets, a bottom needs to be found, and I feel we have not found it yet. I still believe we could see the October'26 Feeders trade down to the 306.00 area and maybe lower. When a bottom in the market is established, I feel we could see the Cattle Markets explode higher. The US Government has been and is clear they want to lower the price of Beef, and I do not think they are satisfied yet. I feel a trade below 300.00 in the October'26 Feeders could be needed to get them off your back and move on to something else. That is when I believe a bottom could be found, and then it could trade much higher. I feel we could see it trade back up to 331.51 ½ in the October'26 Feeder Cattle, that level is 50% retracement from the 52-week High/Low. We could see it pause there until after the election on Tuesday November 3rd. Since the October'26 Feeder Cattle Options Expire 10/29/26, I would be long the November'26 Contract as well. The November'26 Feeders could shoot straight up after the election. Again, I still believe we need to trade 15-20 dollars lower first. With the Government not helping, the President signing an order that will allow 100,000 tones of ground beef imports starting September 1st for 90-Days, more entry points on the Southern Border scheduled to reopen over the next few months, the price of Feed/Grain much higher, and any Labor Day demand will be over in 11-days, it might not be that hard to break from here. I have a plan, and so far, so good, but we will see how everything turns out soon enough. If you would like to hear what my plan is moving forward in the Option Market, just give me a call. I recommend getting your account open, before the markets change. There are a couple November'26 Feeder Cattle Option Trades below, that I sent out yesterday, just to show you what I am looking at. Please give me a call if you have any questions. The Grain Markets have gone nuts and today was crazy. They are not making it easy being long the Soybean Oil, but I am glad I stuck with it. December'26 Soybean Oil traded down to 66.02 early this morning and then shot straight up to 69.50. That is a move of 3.48 and would equate to $2,088.00 for just 1 future. NUTS. That market bounced all over the place today and ended the day up 0.77 at 68.51. I am still long, and I feel this market will breakout very soon. The Sugar #11 had a great day as well with the October'26 contract trading just 0.04 from the contract high, and the March'27 contract setting a new contract high. I highly recommend getting long Sugar #11 in the Option Market as soon as possible. Corn, Beans, and Wheat have all been moving much higher, but a couple of those commodities seem to be overpriced to me. If the US Government ends up putting sanctions on any Chinese Bank/Financial institution, then I doubt XI would come here, and zero chance they would buy anymore Soybeans from the US. Harvest time is right around the corner as well, and $13.00 Soybeans before harvest sounds pricey to me. The Beans could rally again late in the year after harvest, following the Soybean Oil higher, but I like them lower into harvest. There are weather problems developing in India, Indonesia, Malaysia and that could hurt their Oilseed crops, Palm Oil, and Sugar late this year and into next as well. Sugar could continue to have a problem in Brazil well into next year if the weather patterns turn out as predicted. I will have a more detailed report on that soon, but it all points to higher prices for Soybean Oil and Sugar #11. There are a couple trade examples below. Give me a call if you have any questions. Have a great night. 

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I SENT OUT THE SUGAR #11 TRADE BELOW ON 8/27/26

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BELOW IS A DIRECT LINK TO FILL OUT ACCOUNT PAPERWORK - PLEASE CALL ME IF YOU HAVE ANY QUESTIONS.

https://portal2.straitsfinancial.com/Identity/Account/Register?brokerId=978

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GOD BLESS AMERICA

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Give me a call if you have any questions.

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Bill Allen

Vice President

Pure Hedge Division 

Direct: 312-957-8079

ballen@walshtrading.com

 

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