Gap and Go

At The Beef by Cassie Fish, CassandraFish.com

A Handbook for Ranch ManagersCME cattle futures finally shake off their malaise as spot Feb LC begins first notice day gapping higher to the highest level in 4 weeks. With options expiration over, which took open interest back to the recent lows, Feb LC has a new lease on life. Though losing to Apr, Jun LC and Feeders today, the Feb, inspired by strong fed cattle prices, has cleared the path of least resistance for all to follow higher.

2015-02-09_Chart1        

Cash Prices Strong; Supplies Tight

Planned Grazing: A Study Guide and Reference ManualAs cattle that were sold Friday are loaded on trucks today, the hunt for market ready cattle and challenge for packers of filling kills continues. Cash prices last week were higher with a top of $162.50 and this week is expected to be higher as well.

Environmental & Natural Resource Economics: The Austrian ViewLast week’s kill clocked in at 544k, below expectations as last week’s weather disruptions were not made up. Estimates for this week are in the 540k-550k range though last year’s kill for this week was 540,290 head. In light of reduced production, packers have raised asking prices and the cutout is expected to gain in value this week, though modestly, since a big rally is counter the seasonal trend.

Where’s the Market Headed

The Betrayed: On Warriors, Cowboys and Other Misfits    Combat Shooter's HandbookWith a futures market bottom established and the technical indicators pointing higher it’s up to cash prices to provide real world guidance. It would seem that slow seasonal beef demand, large competing meat supplies and limiting export issues were priced in last Monday when Feb bottomed $13 under where cash traded last week.Extremely tight fed supplies have swung to the forefront yet again and how much money can cash fed cattle prices gain in light of packer margins which are back in the red is the key question.

The Essence of Liberty: Volume I: Liberty and History: The Rise and Fall of the Noble Experiment with Constitutionally Limited Government (Liberty and ... Limited Government) (Volume 1)  The Essence of Liberty: Volume II: The Economics of Liberty (Volume 2) The Essence of Liberty: Volume III: A Universal Philosophy of Political Economy (Liberty: A Universal Political Ethic) (Volume 3)Without plummeting futures prices to aid their cause, a packer’s job just got a lot harder. Despite the “loss of currentness” lament for months by some, its excruciatingly obvious weights are dropping and numbers are tight. Certainly too tight to easily kill more cattle than a year ago. Looking back the 576k kill 3 weeks ago, followed by the 563k both may have been overkill relative to available supply.

Given all these dynamics, cash cattle prices could well trade back to the $163 to $166 area the rest of February, paving the way for more upside in futures, which are still maintaining a substantial distance.

The Beef is published by Consolidated Beef Producers…for more info click here.

Disclaimer:  The Beef, CBP nor Cassie Fish shall not be liable for decisions or actions taken based on the data/information/opinions.

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A Handbook for Ranch ManagersA Handbook for Ranch Managers.  In keeping with the “holistic” idea that the land, the livestock, the people and the money should be viewed as a single integrated whole: Part I deals with the management of the natural resources. Part II covers livestock production and Part III deals with the people and the money. Not only would this book make an excellent basic text for a university program in Ranch Management, no professional ranch manager’s reference bookshelf should be without it. It is a comprehensive reference manual for managing the working ranch. The information in the appendices and extensive bibliography alone is worth the price of the book.

You might be interested in this books supplement: Planned Grazing: A Study Guide and Reference Manual.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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