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box beef up-live cattle down-follow along ntexcotton students
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LKM
Posted 5/4/2021 08:43 (#8986634 - in reply to #8986577)
Subject: RE: box beef up-live cattle down-follow along ntexcotton students


Ridgway, IL
garvo - 5/4/2021 07:20

Buying June live cattle at the open-follow along-$1600 is the margin money-
box beef on fire-$300 and we have June Fats at $115 with cash value of that animal at $190 live


I like that you are taking the other side of the market, fat cattle will blow at some point.

Its hard to predict though how long the liquidation will take place as we dont know if drought will continue to push cattle into the market all summer or?

I dont think you can find anyone in the cattle production business that wont tell you placements are dropping like a rock right now. Guys are shipping inventory and not replacing. I would think 120-150 days from now, that makes for a leverage shift from packer to feeder. I would think 60-90 days the market takes notice.

I believe we will see 7$ corn steady to higher for coming 12+ months, of course you could see a limit down day in there.

I still like buying aug 130 calls for 200/contract as a low dollar investment with potentially high reward. Fat cattle will eventually migrate to at least the cost of gain. it could take some time, but not 6 months. These guys chew up their feed inventory for the month and replace with unit trains of 8$ corn and watch placements continue to drop.

May feeders are prob still a sell at 132
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