Interesting article on the cattle price crash

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Hesitated to post that, as I am not overly familiar with that publication. The content seemed legit though. If I told ya what I lost on feeder calves the last quarter of 2015, it'd make your head spin. I've got a reason to be disallusioned if the information is correct.
 
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I'm no rocket surgeon, so take it for what it is worth

Oil is at 30.00 from over a 100
Corn at 3 and change from 8
Wheat, cotton, gold and etc it's all the same story

It's paper being traded.
Imports, COOL, packers feeding cattle, contracted cattle all played a small role
The News drive the market !

City suit wearing boys playing with millions of dollars playing a game and making money.

It's a different world. It has nothing to do with real commodities, it's just paper and money... A high stakes game.

Look at how the futures have rebounded
Its lost credibility

It's a joke
 
Bigfoot, the word is Collusion, not Collision,.. very different meanings..

Collusion is an agreement between two or more parties, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage.


I think they have to look at it from the beginning.. right from when steers went above $2/lb to get a real picture.. I think there's lots of factors involved there, from the strong US dollar, COOL, etc.
 
Nesikep":37jhyuk6 said:
Bigfoot, the word is Collusion, not Collision,.. very different meanings..

Collusion is an agreement between two or more parties, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage.


I think they have to look at it from the beginning.. right from when steers went above $2/lb to get a real picture.. I think there's lots of factors involved there, from the strong US dollar, COOL, etc.
Click to expand...

Auto correct, you gotta love it. I wish it would quit doing that ship.
 
What goes up must come down. Cattle market is no different than the early-mid 2000s housing market. It was over inflated with paper money and every one of us knew that. What I don't think any of us saw coming was the suddenness of the collapse. The strength of the US dollar is hurting exports. The govt allowing all these cheap imports is also negative. The volatility in the cash and futures market is creating a "perception" of bearishness.

With all that being said, I don't discredit the article. Those folks have big money, big power, and big govt backing. It may very well have been partially caused by a "collusion". That resulted in a "collision" with what I hope was the bottom.
 
Bubbles always pop fast. When I do the math on what it costs to put beef on the grocery store shelves with 500lb calves at $3.50, it makes me wonder how ribeyes didn't cost $50/lb.

I don't know about collusion. But you wouldn't have to look too far back in history to find an investment class that had been artificially inflated, or hysterically over-inflated for one reason or another.

Kind of like oil right now. I find it very hard to believe 55 gallons of oil is truly worth only $35. 55 gallons of bottled water would sell for more. But the price continues to fall because that's what the crowd is doing. Sell sell sell, so the price continues to drop.
 
Bigfoot":2va50p0t said:
Nesikep":2va50p0t said:
Bigfoot, the word is Collusion, not Collision,.. very different meanings..

Collusion is an agreement between two or more parties, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage.


I think they have to look at it from the beginning.. right from when steers went above $2/lb to get a real picture.. I think there's lots of factors involved there, from the strong US dollar, COOL, etc.
Click to expand...

Auto correct, you gotta love it. I wish it would quit doing that ship.
Click to expand...

:lol2: :lol2: I don't know if anyone else caught that, but I got a good chuckle from it.
 
When cotton went up to 2.00 everybody back at home planted cotton
Corn went up to 8.00 everybody planted corn
Cattle went up and everybody got into cattle.
Prices are still good enough that they're are hanging on to cattle

Will cattle prices fall off like oil has ?

Most of the commodities that had the big run ups fell back down to the former level

We had a bigger upswing so my guess we'll have a lower downswing.


That'll put a lot of hobbiest and fair weather cattle out

Riding out the cycle will be the tough part
 
SJB":1msobvtz said:
Bubbles always pop fast. When I do the math on what it costs to put beef on the grocery store shelves with 500lb calves at $3.50, it makes me wonder how ribeyes didn't cost $50/lb.

I don't know about collusion. But you wouldn't have to look too far back in history to find an investment class that had been artificially inflated, or hysterically over-inflated for one reason or another.

Kind of like oil right now. I find it very hard to believe 55 gallons of oil is truly worth only $35. 55 gallons of bottled water would sell for more. But the price continues to fall because that's what the crowd is doing. Sell sell sell, so the price continues to drop.
Click to expand...
An oil barrel is a 42 US gallon barrel.. still cheap..
 
This is what you're up against controlling the market.
Trading paper.
Maybe the packers filled the supply going into the shortened Holliday season.
Maybe imports filled the void.
Maybe collusion.

But ....

 
It certainly ended up being paper traders but I thought it started with cash cattle going lower. Packers offered the feeders less. The feeders held longer which made for bigger cattle and put more pounds on the market. And the downward spiral began. The question in my mind is why did the packers offer enough less to cause the feeders to hang on to them? How much beef did they have in their cold storage? How much captive supply did the packers have that they were able to stick it to the feeders?
 
I went to a feeder cattle meeting thing today, and the market was discussed. The gut that done the presentation owns a big marketing firm and he had some background in the cattle business. He said the demand in dec was off, also stated that the packers had a bunch of imported beef in cold storage that needed to be moved. His discussion was interesting but hard to follow at times. He touched on the string us dollar and our exports falling off because of other countrys falling economies. For the most part it made sense. He predicted the prices for 8 wt feeders to be around 1.35-1.40. Its gone be interesting to see what the future holds.
 

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