"... SERENDIPITY People moving along life's pathways encounter changes both anticipated and unanticipated. Operating in the ag world delivers its fair share of unexpected results. Operators learn to live with dashed hopes but also to enjoy unexpected largesse. It has been a while since cattle owners were surprised with unexpected bounty. The expectation meter would be likely to reveal a skeptical pool of livestock owners. The beef packers seem in control of the market and all of the margins available for bringing cattle through the beef pipeline. This has left the breeders, stocker operators and cattle feeders with little to squeeze from the operations where the one constant seems to be higher operating cost and now rising feed costs. The future is always built on hope and several positive impacts are lighting up a more optimistic future but you can't take hopes to the bank. The Mexican tariff deal is resolved or at least for now, but that does not do anything for the current situation, it only stops a harm. The Chinese trade war is far from over but does hold the promise, if resolved, of providing large outlets for both pork and beef. Hidden in all the analysis and discussion about weather and its impact on higher feed cost, is a solid positive benefit to those who run cattle on grasslands. A map of the United States would for once be absent from isolated pockets or large regions of drought. The winter moisture and now spring follow-up rains have the nation's pastures in prime shape. There will be little incentive to rush the replacement cattle to market during this summer period of weak prices. Feedlot numbers may be dipping under last year as summer placement slow. The headlines are full of the new non-meat offerings both plant and lab based but people forget veggie burgers have been around for years. Shares in Beyond Beef's public offering have now moved up 600% in less than a month. The meat industry will take the competition in stride and bank on the substantive fact that beef is hard to beat. Protein from meat sources is not something of which to be ashamed and is not easily deliver by a plant diet. It is a quality product providing solid nutritional sustanence to consumers. As the says goes, "every dog has his day" and awaiting the day is the secret to staying in the fight. While it may have been a long time since finding an unforeseen windfall, experience tells us it may come when least expected. Serendipity would not be possible without the deep seated feeling "I am afraid this may not happen to me", and the exhileration caused by an unforeseen positive event would be lacking. "
"...A USDA stocks report Tuesday pushed corn futures higher and the rally is continuing into late week. The government dropped 3 million acres from the expected corn national acre plantings this spring. At the same time they dropped the expected yield on this year's crop making it more likely prices will remain well above $4 and possibly higher into the coming year. ...The period between Memorial Day and the Fourth of July is generally a strong period for beef consumption. A cool rainy spring has slowed beef demand and pent up interest in a beef cookout will be on a lot of minds...."
It was a hedge because I was way too long corn spreads in my portfolio. I was already long K/N20 and U/Z20, both in larger size. It is a loser, but it was a good trade/decision. I don't regret it. Perhaps I should have cut the hedge after the report. Instead, I am treating H/K and K/N as a butterfly.
06/21/2019 : Out @ -17.25. A stupid trade I shoud have closed a long time ago, or at least with the last few rounds of USDA reports.
06/21/2019 : Out @ -5.25. Nice little trade. I don't want to keep it further since it can be pretty random in the last few days,
What level did you put this trade on? What's your target price? I guess you're talking about CboT corn futures. What contract?
I am long ZC U20/Z20, K20/N20 and short H20/K20 in smaller size. The entry prices are a few pages earlier I think.
I almost gave back all my gains on ZC U20/Z20... You have got a good bargain here for anyone interested.