|
Ridgway, IL | -1.5z = +3.75v that is an awfully stout bid for first week nov, where was that?
with nearby cash trading at -2 to -3lv, why would the packer pay a 6-7$ premium to hold cattle for 7-8wks if their leverage position was weak? That do not make sense to me.
flat price is being supported by the lack of increasing showlists, in my opinion. Showlists are not increasing because of the shift in market from inverse to MASSIVE carry. If that bid of -1.5z fw nov is accurate, if i have cattle ready to kill, and my cost of gain is 80c (which is high in todays environment) then i would increase my NET profitability by 125$/head by feeding for an additional 52 days. That is a daily return of 2.40/hd... which if you are a cattle feeder you know is like cash money raining down out of the sky.
Since we've seen this big market structure shift, feedlot managers are rolling hedges and making them bigger, this is only encouraged by yesterdays wasde report, as you now know feed cost is most likely not a significant risk. I envision the cattle market like a tanker truck, that just slammed on the breaks after a car cut out in front of it... all the liquid surged to the front of the tank... all that liquid does not stay at the front of the tank. Last year, the same thing happened and the market chopped sideways for 5 weeks. I think we are in week 3-4 of 105 trade this year.
| |
|
Fat Cattle
