08/03/2026
Strategy Idea...Cheap put spreads in live cattle.
Cattle futures have bounced sharply, but can it hold? The bull market in cattle that has taken place since 2020 is one for the history books in regard to resiliency. I don't recall ever seeing a commodity hold gains this substantial for this stretch of time. I am not convinced the livestock market will be the one commodity in history that avoided a bust after a boom. Just like the screw worm finally making it over the border was a buy-the-rumor, sell-the-fact situation, I think the border opening was a sell-the-rumor, buy-the-fact phenomenon. Not that that's over; the market will have to stand on its own two feet. Don't forget, live cattle futures were under 200 when we first learned about the screwworm. We could easily see prices come back to pre-screwworm levels. This feels a lot like a dead cat bounce.
