Cattle Market Epic Collapse

[errolanderson]

Cotton, what's interesting in the price discovery of cattle is; the cash leads the futures. Whereas, in the grains; the futures lead the cash.

The North American cattle market is now in a fundamental shift and the cattle board is following this direction.

[westernvicki]

2http://beef2live.com/story-world-cattle-inventory-1960-2014-130-111523014-130-111

World cattle inventory is still historically low.

[errolanderson]

Interesting comments from Glynn Tonsor
Kansas State Univiersity

http://beefmagazine.com/blog/wonderments-about-expansion-current-market

[errolanderson]

westernvicki . . . You are right, cattle supplies remain quite low from a historical viewpoint. But the current problem with the cash cattle market is demand.

Beef cutouts are dropping and slaughter is well down from three years ago. These issues have been triggered by flagging beef demand at the consumer level.

The good news is the cattle board rebounded on Friday, but the bad news may be why? There remains a steady supply of overweight cattle heading to market in the near-term.

But the decline in prices may start to heal the decline in demand at the consumer demand level, but it will take time. Overall, the cash cattle market has now moved into a new, lower trading range.