Limit down
- Thread starter Sunfish
- Start date
Help Support CattleToday:
Stocker Steve
Well-known member
Some people make money when the market goes up, and they also make money when the market goes down... Look how they drove down grain prices early this fall. :nod: So you have to take the Speculation on futures prices with a grain of salt.
The only real price is the cash price paid for a kill animal. My theory is that the packer think they are not making enough, they smell blood in the water, and so they are lowering their bids.
If you don't buy that we can just blame it on foreigners. ;-)
The only real price is the cash price paid for a kill animal. My theory is that the packer think they are not making enough, they smell blood in the water, and so they are lowering their bids.
If you don't buy that we can just blame it on foreigners. ;-)
mwj
Well-known member
The beef end of the business has to sell there product. When it goes in the meat case it is sell it or smell it. Any product has a price point that slows or stops sales. How many head or carcases do you want to own when that price is reached?
Tim/South
Well-known member
Futures have bottomed down all year, cash prices did not flinch and set new record highs.
This time the cash prices have stumbled for fed and feeder cattle. Look for stocker prices to be off some shortly.
Seasonal demand, slaughter shortened weeks and a general slow down in most industry plays a role.
The oil monkey business and corn prices inching up probably have some input.
The stronger dollar slows down exported beef and helps the import market. Australia's beef imports to the U.S. are up 200%. They are in a drought over there and our packers are taking advantage of it.
The sky is not falling. Live cattle numbers are still low. Future prices may be slipping but the future still looks bright. Ride out the little storm and prices will return.
This time the cash prices have stumbled for fed and feeder cattle. Look for stocker prices to be off some shortly.
Seasonal demand, slaughter shortened weeks and a general slow down in most industry plays a role.
The oil monkey business and corn prices inching up probably have some input.
The stronger dollar slows down exported beef and helps the import market. Australia's beef imports to the U.S. are up 200%. They are in a drought over there and our packers are taking advantage of it.
The sky is not falling. Live cattle numbers are still low. Future prices may be slipping but the future still looks bright. Ride out the little storm and prices will return.
Stocker Steve
Well-known member
dun":35fine5m said:
Blame it on OPEC foreigners ?
Named'em Tamed'em
Well-known member
Would the export market have anything to do with it?
With the West Coast " Union snafu " container ships are stacked up in our harbor.
We normally only see them during the storm as were a secondary backup morage area.
Now there is constantly at least four ships sitting for 10 days each before they unload.
With the West Coast " Union snafu " container ships are stacked up in our harbor.
We normally only see them during the storm as were a secondary backup morage area.
Now there is constantly at least four ships sitting for 10 days each before they unload.
tnwalkingred
Well-known member
DMF and I have been discussing this topic for the past few days. I agree with Stocker Steve and Tim. Cash price is what we should all be looking at as well as what the sales reports in your local area are doing. We saw a drop in prices at the local barn on Monday but I think it has a lot more to do with the oil prices and holiday season. I expect they will be back up by the middle of January. The cattle business looks bright and should be for the foreseeable future. Many so called "experts" expect prices to reach even newer highs in 2015. I'm looking to rent another 100 acre farm down the road from my house so I can grow my cattle business even more. It may be a foolish move but I sure am having fun!
KW
KW
stocky
Well-known member
Most of the cattle sales in the area have been lower each day the last 2 weeks with buyers getting some shock waves from the limit down on feeders futures for a total of almost 25 dollars per hundred down, so far. At the barn, feeder calves are down from 25-50 dollars per hundred, depending on quality, from where they were 2 weeks ago.
As mentioned before, the stronger dollar is part of it, with our product now more expensive for other countries to import and we are now importing alot more beef because our higher dollar makes it more profitable to export it than to consume it.
Cheaper corn allows feedlots to feed the cattle to a heavier weight, which makes more beef available.
The big money is always pushing the futures boards up and down for their profits. This is something that is legal, but is also lethal to the health of many farms. The way it is allowed to manipulate prices, our only recourse is to find a way to make it work for us, not catch us by surprise all the time.
Most of the livestock industry is very optimistic, and that can be seen by the price of take home cows not dropping any in this area. The people who are nervous are the people who still have their feeder calves, either weaned or still on cow, that are now worth 200-250 less dollars per head than they were worth 2 weeks ago.
Wish I had better answers.
As mentioned before, the stronger dollar is part of it, with our product now more expensive for other countries to import and we are now importing alot more beef because our higher dollar makes it more profitable to export it than to consume it.
Cheaper corn allows feedlots to feed the cattle to a heavier weight, which makes more beef available.
The big money is always pushing the futures boards up and down for their profits. This is something that is legal, but is also lethal to the health of many farms. The way it is allowed to manipulate prices, our only recourse is to find a way to make it work for us, not catch us by surprise all the time.
Most of the livestock industry is very optimistic, and that can be seen by the price of take home cows not dropping any in this area. The people who are nervous are the people who still have their feeder calves, either weaned or still on cow, that are now worth 200-250 less dollars per head than they were worth 2 weeks ago.
Wish I had better answers.
gonzo
Well-known member
Blame it on the price of bullets :cboy:
Nesikep
Well-known member
Stocky, I agree with everything you say, except where you say it's more profitable to export because of the higher dollar... I think you meant import? Higher dollar would mean it would mean US beef would cost relatively more in non-US funds, thus you have to lower your price to be competitive, meanwhile, you can buy more beef with your dollar, making it profitable to import.
I particularly agree that speculation is the doom of any small and mid size business in the commodities.. the ones that are big enough probably have their fingers in enough pies to make profits either way the markets turn, but for the small guys it can break you... *SOMEONE* made a ton of money during the BSE crisis.. yes, price was a bit cheaper in the store, but it sure didn't reflect the sale barn price of cattle..
I particularly agree that speculation is the doom of any small and mid size business in the commodities.. the ones that are big enough probably have their fingers in enough pies to make profits either way the markets turn, but for the small guys it can break you... *SOMEONE* made a ton of money during the BSE crisis.. yes, price was a bit cheaper in the store, but it sure didn't reflect the sale barn price of cattle..
stocky
Well-known member
Nesikep, What I meant to say is that it is more profitable for other countries to export to the USA, rather than consume the beef in their own country. So, with the higher dollar, instead of other countries importing our beef, they are exporting their beef and our consumers are eating more of their beef and less of ours.
Several factors at play.
1. Feeders were overpriced in relation to Fats and some correction was inevitable.
2. Huge sell off from the funds. Year end, huge profits were made and they are taking said profits to show the impressive 4th quarter returns.
3. Reactionary shock waves from the energy sector are a secondary factor out on the periphery.
The market was oversold as the downtrend broke through trigger points resulting in technical selling in many instances. This has already shown itself with how well the Fats have held together overall and not followed the Feeders to the same extreme. The fundamentals are still sound in relation to tight supplies. I'm still extremely positive about the upside to the market as we move into the spring. Albeit that's "positive" not "foolish" and have been using Put Options on most classes of Fats and Feeders in inventory to protect a profit in most instances.
1. Feeders were overpriced in relation to Fats and some correction was inevitable.
2. Huge sell off from the funds. Year end, huge profits were made and they are taking said profits to show the impressive 4th quarter returns.
3. Reactionary shock waves from the energy sector are a secondary factor out on the periphery.
The market was oversold as the downtrend broke through trigger points resulting in technical selling in many instances. This has already shown itself with how well the Fats have held together overall and not followed the Feeders to the same extreme. The fundamentals are still sound in relation to tight supplies. I'm still extremely positive about the upside to the market as we move into the spring. Albeit that's "positive" not "foolish" and have been using Put Options on most classes of Fats and Feeders in inventory to protect a profit in most instances.
Stocker Steve
Well-known member
js1234":1uyx6ggg said:
Great summary. I expect a typical January/Febuary rally, and now seems like a buying opportunity for gamblers, but no one knows for sure.
Sell/Buy boys don't care since they are in the market routinely.
Caustic Burno
Well-known member
Prices all my life have been down in December.
I always assumed it had to do with tax implications at the end of the year.
I always assumed it had to do with tax implications at the end of the year.
