Trying to hear what's not being said
May 21, 2025 Leave a comment
Hey cattle farmers, at your next several weekly auctions, sell a bit more of your herd than usual.
I am seeing Live Cattle futures prices trading at their most ‘extreme. since the contracts inception.
This is as good as it gets for cattle farmers and beef processors.
And perhaps its the worst it can be for buyers of beef.
May 21, 2025
rob@karriasset.com.au
February 1, 2025 Leave a comment
Cattle ranchers (farmers) should be selling more of their herd than usual…….
And so, at your regional mid-week cattle yard sales……offer more of your stock than you usually do.
Live #Cattle prices are stretched in absolute terms,
and in empirical terms….very much so !
#Beef purchasers (perhaps processors) should be cautious paying up to secure supply at these prices.
Lovers of steaks and hamburgers…..while aggrieved with ‘recent’ higher prices, you should see lower prices from hereon in.
February 1, 2025
rob@karriasset.com.au
June 11, 2023 Leave a comment
An old joke goes…”I went to the butcher shop and bet him $20 that he can’t reach the meat from the top shelf….the butcher replied by saying I can’t take that bet. When I asked him why not, he said the steaks were too high”.
That resonated.
Yesterday, I noticed beef eye fillet was selling for $80 per kilogram.
Cattle prices are at an all-time high.
The attached monthly chart notes the percentages which Cattle prices were trading above its 50 month moving average. The circles also highlight moments when Cattle registered a monthly overbought reading. This has only occurred 7 times over the past 50 years.
Combined with other observations, I think opening a speculative ‘long’ Cattle position is a terrible bet.
It’s worthy to note that since the Russia/Ukraine War commenced, grains prices have halved which has improved the margins for many farmers.
But now, we have an inflection point where the price of grains (used in pastures and feedlots) are making oversold lows and live cattle prices are at the upper end of their pendulum.
With these prices, farmers should consider selling a greater percentage of their stock than they normally do before mean reversion eventuates.
In fact, it is a sellers market and that includes selling the whole enterprise, ranch or cattle station.
Buyers romanced by owning a cattle business can take their chance, but it’ll be best to focus on rearing rather than buying weaners or yearlings.
Speaking of margins, also watch if the CME increases the maintenance margins of its live cattle futures contract.
June 11, 2023
by Rob Zdravevski
rob@karriasset.com.au
February 14, 2023 Leave a comment
Reprising my recent notes about Overbought Cattle prices,
they remain so.
After all, grain prices have nearly halved.
Now, Cattle prices are at extended levels historically.
Observe the extremes, the Monthly is even more so.
February 14, 2023
by Rob Zdravevski
rob@karriasset.com.au
October 27, 2022 Leave a comment
It’s time to lock in the selling price for your cows.
In other words, for sellers of Cattle, prices are now in the territory of being ‘good enough’.
In fact, beef farmers are looking at Cattle prices trading at ‘extremes’ not seen for a while.
The ‘circles’ in the ‘weekly based” chart below show prices coinciding at certain percentages above Cattle’s 200 week moving average, 2.5 standard deviations above a rolling weekly mean and registering a weekly Overbought RSI reading.
It’s advisable to ‘take the fat part of the trade’.
For Aussie, Canadian and Brazilian beef farmers who are receiving proceeds in USD, you’re in a particular purple patch whilst your currencies are trading at reasonable weakness.
Albeit, currency conversion is a seperate trade.
Specifically, for the AUD/USD, I think there is a good probability of seeing the AUD/USD trade below 63 cents again, in the near term.
October 27, 2022
by Rob Zdravevski
rob@karriasset.com.au
November 25, 2021 Leave a comment
I think Cattle prices have reached an interim high.
CME prices are currently US$1.38 per pound.
Whether you’re a farmer, producer, investor, processor or speculator, I would either lock in forward prices or take the money and run (all the way until the cows come home…..)
The fat part of the trade has been had. The chart below shows the Cattle price rising 64% over the past 18 months.
My medium-term downside price target is $1.10.
That could also mean selling your shares in the world’s largest meatpacker, JBS. Its price chart showing its stellar performance is also attached.
Does this make shares in plant based, meat substitute company, Beyond Meat (BYND) attractive?
November 25, 2021
by Rob Zdravevski
rob@karriasset.com.au
rob zdravevski's blog 