Interesting comments on the outlook this week. Never seen the writers of this thing get that analytical... --------------- "THE FINAL ARBITER One certainty is the fact the futures prices posted at the close of any given day will not be the final prices realized at the termination of a specific monthly contract. They simply represent the consensus guess made by traders, with differing objectives and views of the final price. Each transaction posted on the exchange represents two opinions of the market direction – a long and a short. Some positions might be taking on price risk and some taking off price risk. The current trading environment is dominated by the macro-traders betting on a recession and the attendant impact of declining commodity prices and rising un-employment. Many of these traders have never seen a steer and some are not aware of cattle herd liquidation cycles and our current position in that cycle. Their positions in cattle are often accompanied by associated shorts in the grains and metals. Their objective is a big picture bet, and the scope of the investment size is large. This negative price environment has denied margin protection to many of the hedged feeding operations. Hedged cattle as a percentage of total numbers of cattle on feed is in decline. Many operators refuse to hedge a loss. This in time will change as equity losses force some unhedged cattle owners out of the market. So long as equity levels are high in the industry, people will overpay for feeder cattle. The leadership of cash prices over futures is not limited to the live cattle contract. A mirror scenario is occurring in the feeder contract where feeder cattle prices are exceeding the spot feeder futures price/index. Feeder cattle that earlier this year were selling with deep discounts to a runaway futures market are now often premium. Ultimately, supply/demand rules and sellers with a product in scarce supply will be able to dictate the price of the physical commodity. The open and free marketplace will always be the final Arbiter of price. The macro traders can make their bets on the impact of a recession and the speculative longs can take the opposite position calculating on a sharply reduced supply of beef, but no one can accurately forecast how all these factors will balance out until the fat lady sings." -------------------
If I bring up Beyond Meat, Impossible Foods or Turtle Tree you're going to react like alternative energies?
Mmm, no, these are open threads, not journals. But the thread is themed around Whoppers, not Impossible Whoppers, heh.
Like oil, gaz and coal I look forward to the day at least half of the cows of the world are eliminated (going medieval on them!)
If you go medieval on cows, that means you are consuming them! Unless yer talking Hindu bits, which involves saving them so you can have lots of ghee. Which means more cow farts, which means more Greenhouse gas. Frak, we're doomed! Blame Krishna.
No, I would tax the hell out of the meat industry! Isn't NZ about to tax cow farts? We know that cows are a major source of pollution, not their fault but ours for turning them into products of mass consumption. Deforestation, huge water consumption for feed, fart and dung, diseases in slaughterhouses and abuse of antibiotics... Just imagine when the poor world becomes wealthy enough to eat meat as frequently as the rich world does... Make meat expensive enough to allow lab grown meat to invest the cheap meat market.
https://www.onegreenplanet.org/envi...-trying-to-stop-pollution-from-factory-farms/ Tiny Wisconsin Town Sued After Trying to Stop Pollution From Factory Farms 2 days ago By Hailey Kanowsky The small town of Laketown, Wisconsin, tried to stop pollution from factory farms and then was sued by the very same factory farms. Source: The Real News Network/YouTube The small community in Wisconsin is home to just over 1,00 people and 18 lakes. They have been at the forefront of the battle on how communities can regulate large industrial farming operations happening right in their backyards. A lawsuit supported by the state’s largest business lobbying group has now been filed against the town. The lawsuit claims that the town board overstepped its role when it passed a local ordinance to prevent pollution from concentrated animal feeding operations (CAFO), Grist reported. After the town passed the local ordinance, they received a letter from Wisconsin Manufacturers & Commerce, the lobbying group, that said they would seek legal action if the ordinance was not repealed. “They see this ordinance, if not challenged, as something that may become more the norm around the state,” Adam Voskuil, staff attorney for the nonprofit law office Midwest Environmental Advocates, told Grist. CAFOs are huge around the state of Wisconsin, and locals are beginning to see the effects. These operations have been linked to numerous public health issues. According to Grist, Midwest Environmental Advocates attorney Voskuil said that he was ‘heartened’ to see Laketown holding its ground. “This is one of the first times I’ve seen a town refuse to back down to some of these letters,” he said. Factory farms are extremely unsustainable and harmful to our planet. They cause mass deforestation, account for 37 percent of global methane emissions, and use 70 percent of the world’s freshwater. Even though the animals are kept in inhumanely cramped spaces, it takes quite a bit of land to grow food to feed these animals, and thus, large swaths of forest are cleared to make room for livestock feed. Furthermore, the animals’ waste may be kept in large lagoons, which not only take up space but also pollute water and air. As a result, meat and other animal products, like dairy, are extremely harmful to the environment. Plant-based foods generally have a much smaller environmental footprint than meat. One study found that a serving size of meat is responsible for 20 times more greenhouse gas emissions and 100 times more land use than a serving of veggies. According to the study, “Producing a serving of processed red meat has the second-highest mean impact on acidification, GHG emissions, and land use and the third-highest mean impact for eutrophication.” Another report found that people who eat meat daily produce 2.8 tons of carbon dioxide annually, as opposed to 1.5 tons for vegetarians and 1.1 tons for vegans.
More analytics in this week's weekly blurb. I find it all so interesting... ------------------------ NEXT COMES VOLATILITY "Market prices whether futures or cash are made at the margins. In times of constricted supply, the last few trading prices necessary to fill buyers needs can fluctuate dramatically from the previously established baseline. The best example is the termination of a live cattle contract when only a few remaining contracts must find a price point for closure or deliver. Prices can jump or fall several dollars in the last few minutes. In everyday trading in fed cattle pricing, packers will purchase all the cattle available at the lowest price before moving to a higher price level. Depending on the structure of the marketplace the jump to the next level can sometimes be a large gap. This past week witnessed extreme moves in the composite cutout values reported by USDA daily. The week started with a report of a $7 decline then next transitioned to a $6 gain. Extreme changes in the reported prices of ribs changed the overall composite price in a major way. First the volumes of transactions can be small in any given primal cut and the impact of that value on the overall cutout index can distort the result. This week replicated the erratic behavior of the boxed beef composite when Monday’s round up prices jumped $8 on the choice cutout. This same phenomenon can occur in the cash markets for cattle when small groups of cattle can trade and are reported but should not be representative of price in the marketplace. One hedged feeder might decide to sell, based on the basis, while the majority of sellers pass the bids of the same price. Packers also join sometimes to make extremes in price because of the need to fill retail orders. Normally they disguise those prices using “over the tops” or in the beef purchases so they are not reported in mandatory price reporting. With a declining open interest in the live cattle contract, one can expect more volatility in the futures market. The feeder contracts already are lacking in liquidity and price moves tend to be exaggerated. The same will be likely to occur in live cattle as cash moves become more volatile and open interest declines and the industry fails to re-engineer the contract. OKC stockyards market roundup this week reported unevenly steady prices with instances of $5-8 higher prices whatever that means. The calf trade is another source of volatility as we near the bottom of this liquidation cycle in the national cattle herd. Many of the calf sellers might ignore declining feeder cattle futures to enjoy the competition for a less than sufficient number of replacement cattle whose prices are jumping daily. Historic normal differentials between steers and heifers are also violated as new breeders are groomed for production. A combination of poor liquidity [fewer transactions] and forced transactions on the margins of the market will force more volatility in pricing during the coming year. All markets have come to recognize these transactions as a price squeeze."