Cash Cattle Market Update

[errolanderson]

A rough go of late . . . The cattle
board has been in near collapse and both
fed and feeder prices remain in decline.

For all the Agriville boo birds pooing
pooing marketing so much lately . . .
just look at the cattle market.
Marketing has not been horsesh-t in this
market, if has been a financial
lifesaver.

And note . . . as soon as the soy rally
is over, so will the comments that
marketing doesn't matter.

Errol

[ALLFARMER]

http://futures.tradingcharts.com/chart/GF/

No doubt, markets all opening up everywhere,
small feedlot inventory in USA and Canada, cow
herd numbers declining and a tanking market.

What's driving this downturn Errol?

[cottonpicken]

Don't worry about what people think or much less say
here.It always reminds me of that movie clip from
oceans 12 when the gang has to come up with money
they stole from the previous movie oceans 11.

As they go around the room everybody is way down
from their cut,until they hit one old guy who is way
up,the whole room turns and stares and he says-

"what,you think the market is beyond the realm of
human understanding"

[errolanderson]

ALLFARMER - the North American cattle
market simply was overbought. Texas cash
went to record highs of $130/cwt in
March and packers were bleeding big-
time. But it took some extra factors to
push this market over-the-cliff.

Funds had bought-the-hell of of this
market. The market cannot maintained
this momentum and simply exhausts itself
(sounds like soybeans and canola
sometime ahead)

Then, gasoline prices ramped toward $4
per gallon in the U.S. People need gas
more than beef. Wholesale beef demand
dipped as big retailers had already
bought more expensive beef in late Feb.
These retailers were not impressed.

Also pork production rose. And Cdn hog
bids have been on a 5 cent/kg drop week
by week right now. Lots of pork in cold
storage.

Then, the media gored the market last
week through their pink slime campaign
(finely ground beef). This also hurt
demand. The media can be self-serving
bastards at times IMO.

So what now? Grass cattle bids dropped 3
to 5 cents last week. Packers are well
covered right now as wholesale demand is
dropping and feedlot currentness is
weakening during a period when beef
demand should be seasonally ramping up.

The cattle board is likely to get
oversold as funds are in panic sell mode
and it's due for a bounce, but the cash
market is definately hurt. Packers want
their money back from months of negative
kill margins and suspect that they will
just do that by May. Cattle basis levels
may widen out.

For feeders with price protection, cash
contracts futures and or puts and put
option bear spreads, hug 'n hold.

Thankfully the stock market continues to
hold together.

From a grumpy Errol

[cottonpicken]

Jeez,must be in vix.

If you get 3 solid up days in cattle you'll be getting
more phone calls than the current soy complex,which
is NOW entering oversold.

[cottonpicken]

Correction-soy broke trend to the up,new uptrend
possible,as Charlie stated before a healthy correction
would have been better,our numbers maybe different.

[hobbyfrmr]

After a decade of break even-ish grain prices, I
was always trying to figure out why prices would
beat me up. I have come to learn, the market is
always right. I have frequently sold into the
futures just to get enough price to make black ink
on my small farm. In my view of any (free) advice
from AV so far has not been harmful or subject to
place farmers into disaster, or red ink. If you don't
like the advice don't use it. My call is that there will
be farmers selling canola, if it hasn't heated, for
9.80 per bushel and at the coffee shop talking
about how it was $13.00 but they could not get a
truck, or they were on vacations or road bans,
or....place weak excuse here. This is a medium to
exchange ideas and information. Take it or leave
it.