Live Cattle (Cash Index): The live cattle cash index rolled into a major (long-term) downtrend at the end of November as it fell below the previous 4-month low of $177.42. Theoretical Positions: Hedgers have likely continued to roll put options up and sell cash. If so, the move to a new 4-month low by the cash index would be in their favor.
Feeder Cattle (Cash Index): The cash market extended its major downtrend to a low of $222.25 during November. Given the degree of the selloff, from the September 2023 high of $254.10, a Wave B (second wave) rally within the 3-wave downtrend would not be surprising. The initial downside target is near $200.67, the 38.2% retracement level of the previous uptrend from $114.23 (April 2020 low) through the September 2023 high. Theoretical Positions: As with live cattle, hedgers have likely continued to roll put options up and sell cash. Additional sales could be made on a possible Wave B (second wave) rally within the new major 3-wave downtrend.
Lean Hogs (Cash Index): I’m not getting a good read on the major trend for the cash lean hog market. After completing a bearish 2-month reversal at the end of August, the index gapped down to start September and extended its selloff to a new low of $69.74 during November. Theoretical Positions: None at this time.
