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The Live Cattle prices are extremely low compared to my expections. I have no idea about the June contract. But it seems to be rather certain that in fall production will be on stream again without severe problems caused by the virus, and that restaurants have re-opened. And, thus, that the price of Live Cattle (December future) will be somewhere around 115 - 120 USD.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
I saw something on Twitter that was saying they are killing/euthanizing Cattle & Pigs to save on the feed cost the market is so over supplied currently
Correct, I agree. But according to my knowledge this killing is done primarily for pigs.
The oversupply is the reason that I bought the December contract. At this tiime of the year, the virus problem should be solved. Production should be back on stream, and restaurants should be open again.
I still hold long positions in the meats, currently the LCV, LCZ, and the LHG.
Restaurants are opening again, and, thus, meat consumation will grow again.
Americans seem to love meat, and, thus, there will be pressure for the processors to raise their output. This pressure comes from the market - price for meet is extremely high - and from politicians, eg. Mr. Trump.
I do not like to trade the M, N, and Q contracts, as the closure of a processing factory would change a lot.
Made me laugh. But just as a point of comparison, here the locals don't eat much meat. They mostly eat fish and rice. A gringo that moved here 60 years ago and married an Ecuadorian owns the best butcher shop in Manta, and he is the only place I can get good meats. He has his own cattle.
Point being, different cultures can really make a huge difference.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
You live off the land. Americans have converted their land into livestock more than any other nation. Why do the English eat so much lamb and so little beef? Because the sheep live on the sides of mountains but cattle don't! I know you know this but TexMex is huge in Texas. Why is it called TexMex rather than Mexican food? Because TexMex is based around the meat, where as real Mexican food isn't!
According to Wikipedia, the meat consumption per capita in the US was 120.2 kg / year compared to 88.1 kg / year in Germany. Figures are form 2009, I did not find more recent ones.
I have been asked about educational materials regarding meats.
I get a lot of information from the daily Hightower Report. They write a lot about supply and demand, discuss various reports, talk about COT data and show important developments regarding weather on a daily basis.
Additionally, I am a customer of Kevin Bost of Procurement Strategies, who gives good information on the development of cash prices.
