The movement in cattle futures is a bad joke. The only result of the sell off has been to further line the pockets of the processors. The late beef report showed choice boxes up $1.5 and select up $3.5. The constant debate regarding the heavy influence of futures over cash will never conclude and shouldn't, however, a strong, well constructed futures contract will function to correct pricing errors. This delivery contract will not serve those needs. The crash in futures paniced cattle owners and triggered sales to eager packers at $106 -- $2 lower than the bulk of last week's sales. Processing margins already at a healthy $200/head will be widened as packers take advantage of the windfall from falling futures prices. Close outs moved into the profit column during the month of October, but the recent reversal will leave lots of inventory scheduled for sales late year and next in jeopardy. Breakevens were first threatened by sharp increases to feed costs and now by futures price declines. Inventories of cattle both in feedyards and outside, will take large write downs at months end. Cattle Futures. Futures barely made the + column after spending most of the day in the tank. An early higher opening gave way to more selling recovering at the close. Open interest is falling as futures fail to attract buyers. In most commodity markets a combination of market makers, speculators and commercial interests would jump into the long side... Indeed, an interesting slope heading into the cold months. I blame the virus (and Canada, of course)...
LE cow has been rather dead. suddenly on 19 Oct 20, it moved decisively and had a 4 points range. The last time it had a big range was about 6 mths ago. I doubt it is good for day trading. Let the farmers and spreaders trade the cow. Mooooooo