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Corn vs. Cattle??

Big Swede

Well-known member
With the drop in corn futures of nearly $2/bushel in the last couple of weeks why are feeder cattle going down too? I don't get it, shouldn't they be going up in the same relationship as corn is going down? What gives?
 
A

Anonymous

Guest
Big Swede said:
With the drop in corn futures of nearly $2/bushel in the last couple of weeks why are feeder cattle going down too? I don't get it, shouldn't they be going up in the same relationship as corn is going down? What gives?

I think some of it is because of the fact that Congress is close to passing a new Commodity's Trading Law which will make markets much more transparent and require those that are not actually owning or taking delivery of product to put up higher margins and limit the amount any one entity/individual can invest in one product...

Both corn and oil had highly overinflated prices because of speculators- some of who are now getting worried and dumping their holdings....

Its been long suspected (known) that these markets can be/are manipulated both up and down by the big marketers thru loopholes and intentional nonoversight by CFTC- ala Hillary's big reaping in her first trading venture....

Lieberman today on TV indicated that this is a bipartisan agreed to bill:

Meanwhile, Senators Susan Collins, R-Maine, and Joe Lieberman, I-Con., introduced the Commodity Speculation Reform Act of 2008, S. 3248, which they claimed would curb excessive speculation in the commodity markets, which is contributing to the costs of food and energy. The bill includes three proposals to (1) prohibit pension funds and governmental entities from investing in commodities, and prohibit other large institutional investors from investing in commodities index funds; (2) cap the amount of overall market share in any one commodity that can be held by financial speculators; and (3) close the so-called swaps loophole which allows large investors to skirt the individual speculative position limits created by Congress in 1936.
 

murph

Well-known member
Didnt you notice what feeders did as corn was on a rampage upward? They never really crashed as would be expected, so that tells me that true numbers of feeder cattle are short and could stay that way.
 

sic 'em reds

Well-known member
The price of corn affected more than the price of corn. Hay is starting at $175 per ton here which has also put a pinch on the price of feed. The feedlots aren't wanting to feed cattle too long around here.

On small lot owner I know said that 650 pound calves are only worth about a dollar around here due to time on feed.

The report that comes out today should show that numbers on feed are low, but they say there are alot of cattle outside still that need to be placed(grass calves and weaners).

Alot of guys are going to wean and feed up calves this year unless they get a good price for them. I don't think it will help the bottom line, but it's better than a dollar or less. Fortunately there is alot of corn and wheat pasture to possibly go to.
 

rjn5097

Well-known member
Seems like a lot of the strength in the feeder board is closely related to the premium held in the deferred live cattle futures. That was part of the reason we saw $115/cwt feeder contracts in the face of $7-$8 corn. Live cattle have been under significant pressure over the last 3 weeks which has led to a softening of the feeders.
 

Big Swede

Well-known member
My neighbor just sold a load of 6 weight steers privately for $1.23 for October delivery. Sounds pretty good to me. The video sales have slipped a little lately from what I have heard.
 

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