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Great expectations have been laid out for the importation of beef and cattle, but nothing physical has seemingly come across the border. Hence, the initial shot fired over the bow, that stated the current administration was going to attempt to lower beef prices, created a whirlwind of furry and created more questions than answers. As the calm approaches after such a deluge in selling, I don't think the administration has backed up or off one bit from attempting to lower beef prices. Therefore, while the when, what, where, and how much, continues to be sorted out, it may provide cattle feeders with some opportunities to prepare for is anticipated to come. The first objective has been to use the sharp break in price to buy back previously recommended short call options, or buy call options in an attempt to capture open position equity, regardless of derivative used, all the while maintaining short futures, long put options on futures, or LRP policies. This recommendation is expected to keep you net short the market with some upside potential to make adjustments, were the opportunity to present itself. If another, out of the blue, black swan swoops down, you will remain short with the premium of the long call option your detriment.
If you have been slow to do anything, and still think prices will move higher, I recommend you gauge by how much higher, as in a new contract high of futures or cash, or just a retracement of the recent loss in futures. Forming this idea may be of benefit when considering the amount of working capital at risk and prices for which were seemingly already egregious towards other entities within the industry, as well as some consumer push back. This is not to say cattle/beef prices won't return to previous highs or even exceed them, it simply suggests there needs to be some pretty willing participants to do such.
The Head & Shoulders pattern of the feeder cattle is not quite text book, due to the drooping right neck line, but everything else is pretty much playing along. An initial move off the bottom has been made with significant consolidation in a wide price range. The time it takes to work out the details of importing more beef or cattle is expected to provide producers an opportunity to make adjustments to positions. The calm during the middle of a hurricane. The front side came through and created significant damage, as well as good, to some producers. With the ability to achieve some procurement at the lower end, and potentially some upside to market into, producers are expected to be able to do most anything needed at varying price levels to help prepare for what is expected to come. That being, regardless of time line, more imported cattle and beef, with a very good consensus that more bred heifers will be available to the market come this spring. With a belief the consumer won't increase consumption rates, or be more willing to pay a higher price, more of the margins found in production are expected to come from within the industry. Several CEO's, that are directly correlated to retail beef sales, have already made statements adhering more to recessionary aspects of the economy than inflationary, with current stagflation, a real problem.
As above, I recommend remaining net short the market with a plethora of derivatives to help you manage the excessive volatility and price expanse seen recently. Be careful jockeying in and out of positions without the net short stance, simply due to expectations of further price moving news to come abruptly, and not with forewarning's.
All ended higher today. Surprise's continue with the President working hard at achieving goals. I think the wall of worry on grains moving higher is just steep enough to keep them moving higher. Corn is less than a penny from closing at a new high from contract low today. Beans have soared higher with upside targets tough to determine.
Energy flip flopped back and forth today, but ended the day higher. I remain confused on the next most probable direction, but for the moment, it appears higher than lower.
Bonds were weak today and could have possible reversed to lower. The President is attempting to stimulate the economy and the bond market isn't having anything to do with it. I think it as simple as other countries do not want to buy US debt, forcing the US to have to buy its debt to fund the spending spree it continually increases. I pulled this from X this afternoon:
Federal Reserve Injects Record $50.35 Billion into Banking System via Repo Facility
Last updated 8 hours ago
On October 31, 2025, the Federal Reserve injected a record $50.35 billion into the U.S. banking system through its Standing Repo Facility, including $29.4 billion in overnight repurchase agreements against Treasury securities, amid month-end pressures and reserves at a four-year low of $2.8 trillion. This surge, the largest since early COVID-19, stems from quantitative tightening that has reduced the Fed's balance sheet by over $1.5 trillion since 2022. The central bank intends to end QT on December 1 and transition to reinvestments to stabilize liquidity without expanding its balance sheet.
This story is a summary of posts on X and may evolve over time. Grok can make mistakes, verify its outputs.