Any live cattle traders here?
- Thread starter long
- Start date
Here's the latest blurb from the cow side...
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TAMING INFLATION
"The prospect for a soft landing gained some traction in January. Some thought interest rates were nearing a peak as .75% increases gave way to .25% rises. Layoffs are common but new hiring is active helping to brunt the damage. Corporate earnings softened but guidance seemed to forecast improved conditions down the road. Stocks rallied to one of the best performances for a January in years.
That was January. February has brought a reality check and the optimism of the first month of the year has given way to a more skeptical view of the future for the economy. Credit card debt is rising. Savings accounts are being depleted and household debt is rising as young people attempt to deal with inflation through more debt. The soft landing is hitting bumps in the road. The Fed board members began whispering the view that inflation can’t be tamed without significant additional rate hikes.
The ag sector is certainly not immune to the fallout from continuing economic woes. Falling export demand has broken the grains out of their trading range and sent futures prices downward. Squeezed household budgets are threatening what should be runaway prices for beef due to the sharply declining numbers of cattle. All ag input costs remain high and interest rates are becoming a feature item in any ag operation.
The question is whether the Fed can produce deflationary measures without causing a recession. In a paper presented by well respected economists to the monetary policy forum at the University of Chicago, the writers found NO instance in which the central bank’s disinflationary measures failed to create a recession. The latest report on inflation showed a 5% rise in January compared to the Fed target of 2%.
The impact on cattle prices is less clear. There is little debate about where we are in the cattle cycle. The supply side is extremely bullish for prices. Every report confirms the fact of smaller supplies of cattle well into the future. Less clear is the impact on demand from a struggling economy."
The last paragraph sums it up well, imo. Consumer confidence is a factor in the decision process of what and how the family is fed. It should be interesting to watch restaurant demand throughout the year.
What are the inputs on that chart? Shows Covid lows in '20 higher than prices in '16?
Not sure I follow. There were no inputs (on my part). It's just one continuous chart with the front contract at the end. Why, is it supposed to look differently? How does yours look like?
As you can see the two points are pretty much the same.
There's a video for that. Sorry, can't post it.