Big Muddy rancher
Well-known member
So your telling me that calves bought in September for January delivery will be the same price as the January cash market?
Kindergarten: "If the delivery and possession of cattle in the captive supply was essentially the same, then competitive markets with transparency would have reduced differences in the two markets to close to zero. Sometimes the market would get it wrong and one would be higher than the other. Statistically speaking these differences would have washed out over longer periods of time."
Kindergarten: "The problem with part of the captive supply was that its price was tied to the cash market. Therefore, any discrimination between the cash market would, week after week, decrease the captive supply price. This would turn out to be a suppression of the whole beef market."
~SH~ said:Kindergarten: "If the delivery and possession of cattle in the captive supply was essentially the same, then competitive markets with transparency would have reduced differences in the two markets to close to zero. Sometimes the market would get it wrong and one would be higher than the other. Statistically speaking these differences would have washed out over longer periods of time."
BMR, since arguing with Kindergarten is like arguing with a post, I'll just tell you that he is totally wrong on this. I explained to him that this week's cash market deliveries and this week's formula deliveries, WHICH WERE PRICED OFF LAST WEEK'S CASH MARKET, would not be the same because each week has different supply and demand factors playing on the market.
Doesn't matter how many times I explain it, Kindergarten keeps spreading this same bullsh*t.
THIS WEEK'S CASH CATTLE ARE PRICED BASED ON THIS WEEKS SUPPLY AND DEMAND FACTORS. THIS WEEK'S "NON NEGOTIATED" FORMULA CATTLE ARE PRICED BASED ON LAST WEEK'S SUPPLY AND DEMAND FACTORS.
There, I said it again and Kindergarten will not refute this yet he'll go on ignoring this fact and continue to repeat the same garbage like a programmed robot.
Kindergarten: "The problem with part of the captive supply was that its price was tied to the cash market. Therefore, any discrimination between the cash market would, week after week, decrease the captive supply price. This would turn out to be a suppression of the whole beef market."
Yet miraculously prices move higher at times blowing this theory clean out of the water.
~SH~
Kindergarten: "SH, if packers are not arbitraging the differences out between the cash and captive supply markets for cattle that can be delivered to the plant at the same time, there is evidence of market manipulation. Period. Sorry you don't understand that fact and want the different time period between price determination and actually delivery and possesion to be a red herring. Pickett did not believe that and the jury dd not believe it either."
Big Muddy rancher said:Econ what is the factors that priced those September cattle have changed.
Price of grain can change from September to January.
The price of fat cattle can change.
Demand for cattlle, ie for tax reduction.
Availability of cattle changes.
Theory doesn't alwatys work in the corral. Any cattle man that's sold and bought cattle knows that.
Weather can affect the price, cattle can come to market faster or slower , that will affect the prices.
Should feed lot operators not be allowed to manage their risk by not contracting fats?
Then by the same token should ranchers not beable to manage risk by not contracting calves for future delivery?
These video auctions that sell the calves for future delivery are a form of contracting.
Funny that the LMA hasn't tried to outlaw video cameras. :cowboy:
~SH~ said:Not many years ago the same packer blaming conspiracy theorists accused the large packers of manipulating the futures market. A big government investigation was conducted and it was discovered that the large feeders had a far greater number of short contracts than the packers did. Another baseless conspiracy theory shot down in flames with the facts.
~SH~
fedup2 said:I would like to point out one thing that may confuse some. The references to 'futures deliveries'. (and feel free to correct me if I am wrong) There are no deliveries in the fed cattle market as it is cash settled.
Here are a couple of sites that may interest you.
http://agecon.uwyo.edu/Marketing/mngtcmkt/PricDetr.pdf
http://www.gipsa.usda.gov/pubs/captive_supply/app_b.pdf Includes many studies with different conclusions.
~SH~ said:There is no respect deserved for those who spread misinformation without one iota of fact to back their opinions. The name calling and discrediting has gone both ways at this site forever. Nobody has the high moral ground there although some would certainly like to believe that they do.
Fedup if you want hand holding posts I'd suggest the coffee shop! Nobody has a gun to your head forcing you to read repetitious posts and your critique falls on deaf ears.
The popularity of this site is based on the fact that you get both sides of the issue to where you can conduct your own research and see for yourself who can back their position and who can't. The negativity goes right along with it much like political campaigns. If you have a question ask. If you need nicey nicey hand holding, find another forum.
This forum is unique in that bogus conspiracy theories will be exposed for what they are. As long as misinformation is presented at this site it will be corrected with factual information. This site will not turn into another blamer's site for conspiracy theorists to tell eachother what they want to hear rather than WHAT THE FACTS WILL SUPPORT.
Who cares what you think of how people post? How people post is just a diversion from what they post.
~SH~