Cattle prices have been somewhat controversially linked to economic strength/weakness. Cattle prices are exhibiting major topping patterns here as a flurry of hedgy activity has pushed the market to the brink of what we believe will be a major downturn. I'm not an equity bull, though i do think 1500 is in the cards for the SP, but if we see LC bail hard in the next few months, I think it will lend credence to a downturn in economic conditions.. Just my thoughts...
Cattle price is the steak index. People dont have to eat steak and wont if it does not make economical sense. So as the demand for cattle rises then it can be assumed the economy is also rising. I would say this is a logical assumption although I have no idea the actual correlation.
Nice chart. And yea Nazz, there's a correlation. In the 90's commodity deflation was good for equities. This decade inflation has been the sign of a boisterous global economy.