Live Cattle and Feeder Cattle Limits increased

[mncowboy]

Noticed today the Feeder limits were extended from $4.50 to $6.75 and Fat Cattle increased to $4.50.
Anyone have an opinion if this is good or bad for the producer? I'm thinking it'll only increase the volatility but I may be wrong.

 

[TennesseeTuxedo]

I like it.

 

[Bigfoot]

I'm afraid it gives the desk jockeys even more wiggle room.

 

[Son of Butch]

Really doesn't effect a producer not involved in futures, but gives traders and option market timers more risk/reward.

 

[WalnutCrest]

More liquidity equates to better prices in average and over time ... because when times are bad, it increases the odds one can get OUT of a position they no longer want to be in.

So, yes, more P/L for the desk jockeys ... but without liquidity (and volatility) there is no price discovery.

This is a good move.

 

[Stocker Steve]

without liquidity (and volatility) there is no price discovery. This is a good move.

2X The limit rules changed a couple years ago.

The interesting thing is all the talking heads are not focused on corn and beans. So there are a couple themes on the commodity cattle market currently:

1) no one knows what or why
2) world economy is so good that folks will buy more red meat rather than that nasty white stuff
3) graze out wheat cattle are going to tank the market soon
4) the funds did it