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Senior Contributor

LC futures

Huge run then this big break.

 

Ideas?

 

artifice

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8 Replies
Veteran Contributor

Re: LC futures

It's going to be hard to get a sustained run-up in meats with 10% unemployment.  There is a 'tight' supply of beef but probably a tighter supply of disposable income.  If beef price goes up at the counter ($0.50-$1.00 per pound) I see a 5-10% drop in demand.  Remember when fuel prices got 'high'?  Doesn't mean cattle won't have a spike.  I see it happening closer to year's end.

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Senior Contributor

Re: LC futures

what would be high for meat? 

 

fuel went from 150 to 440.

 

beef has pork and chicken to compete with,

 

would 1.99 ground chiuck to 4 do it? 

 

I thinkj is supply fell 10%, lives would trade 130-135,, rough guess.

 

much of final beef is proicessing/marketing/distribution

 whiohc wouldn't go up in cost.

 

Just discussing.

 

artifuice.

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Veteran Contributor

Re: LC futures

I asked a couple of my town friends where the price of hamburger would have to get to affect their shopping list.  One said they would buy less at $4 and wouldn't buy any at $5.  The other said his wife buys the high lean and it's probably already $4.  Middle class families with decent jobs. 

Mabye there is more room for price improvement without affecting demand than I thought.  Processing/marketing/distribution costs 'should' be the same no matter what the cost on the hoof.  Do you think we could double beef price without affecting demand?

10% less supply won't happen for a while.  Even though a lot of lighter weight cattle were placed, they are pushed when they hit the lot.  Mabye after years end?

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Veteran Advisor

Re: LC futures

You know guys I think we have many things that are at a tipping point.   We need to see how the hoof and mouth thing in Japan will afest the market say in 6 weeks.

We had the hoof trimmer out on Friday.  He had a dairy animal health salesman from an Aussie Company out with him also.  Very interesting to talk to him.  One of the things that he said was how that india and China among with Indonesia have a very big footprint there buying up foodstuffs. He thought they could consume all of their excess food production and that it was actually starting to push consumer prices ther higher. 

With that being said and the Eu trully holding on to most of Brazils production I would say Japan has argentina, Chile, and the US to truly bargain with. A bnig step up in purchases from Japan could rally this market.

 

THe CWT should announce within two weeks what they will be removing in the dairy herd.  I would think it will be one of their smaller buyouts as they haven't got the money.  This could certainly wiegh down the market for a time. 

 

The heat is about to hit the plains and when it does the gains will fall behind and totall tonnage will fall. when this happens the market will keep the price high enough to keep everyone current on marketings so we will again have a reduction in tonnage.

I think 160 LCby DEC. 

THat is what I am looking at. from here. OH by the way my wife and I were out for a drive last night and she noticed how poor the corn really looked overall.  If she noticed that means corn has some up and if corn moves higher by 50cents than cattle will make that 1.60 even sooner JR

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Senior Contributor

Re: LC futures

THX for the insight.

 

I am going to study this and report back!

 

Artifice

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Senior Contributor

Re: LC futures

weak stk mkt clobbered LC

but I see a spring

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Veteran Advisor

Re: LC futures

The spring was the corn market.  I think we move sideways till august than look out. 

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Senior Contributor

Re: LC futures

moving into 2011, 2012,

 

we w8ill be short  of beef.

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