Tariffs Rattle Markets: Cattle Funds Overextended, Grains on Watch

Author: Nathan Harris, Ag Optimus, Akron, IA Branch

🌐 Markets in Panic Mode

Last week ended in a washout across nearly all financial markets.
The trigger? Tariffs.
President Trump is taking a hardline stance globally, prompting fears of retaliation and uncertainty—typically a bearish cocktail.

✅ Some countries (South Korea, India, Vietnam, Argentina) are extending olive branches.
🧊 Cooler heads may prevail by mid-week.
⚠️ Until then, expect heightened volatility.

🐄 Cattle: Watching Fund Exposure as Markets React

• Live Cattle: Funds net long 142k (near record)
• Feeders: Funds net long 33k (also elevated)
• Both markets sit near all-time highs

⚠️ This setup is vulnerable—especially in the current macro environment.
🦢 With equities selling off, we may face a “black swan” scenario sparked by tariffs.(opinion)

📉 Thursday & Friday price action broke key supports.
Remain aware of the possibility of fund liquidation and price pressure
💡 Use options to manage exposure.

🐖 Hogs: Limit Down, But Possibly Undervalued

• Heavy selling after China threatened retaliation
• Mexico relations improving, offering some relief
• Despite the pressure, hogs may attract value buyers (opinion)
  ➡️ Cheaper protein = consumer shift = demand support

Image: ADMIS

🌾 Grains: Bearish Fund Positions, But Corn Stands Out

• Funds hold short positions in:
  • Beans
  • Wheat
  • Cotton
• Corn: Neutral positioning

✅ Friday’s corn action, in our opinion, showed solid resilience.
📊 Domestic demand may be the key driver as the export outlook remains murky
🌱 As planting season begins, weather will matter
➡️ Adverse conditions could flip the script and bring funds back long (opinion)

Bottom Line:
Options are your best friend in this kind of market. (opinion)
Tariffs are the headline risk, but weather, demand, and fund flows will drive direction.

Stay nimble.

Have a Great week!

Nathan

Have questions about your marketing strategy? Call Nathan today! 📞  712-435-7879