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Not too long ago the U.S. was considered the “Bread Basket” to the world. I recall in grade school a geography teacher telling the class how Kansas supplied world buyers wheat.
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Growing up in a suburb of a large city, I thought wheat went into stores and made bread, evenly sliced and sealed up in tight plastic bags.
For as long as I have been a commodity broker, hope has never been a word to use in agricultural risk management.
However, I find myself hoping for normal seasonally weather changes.
There is one thing for certain; I am not alone hoping current weather patterns will change. Cattle producers especially in the Plains and Southwest are going into the third year of a drought.
When the Oct. 19 Cattle on Feed Report was released, it showed placements at a 16-year low.
Many analysts assume and predict cattle and feeder cattle prices will rally because of the low expected placements.
It must be a surprise to those wanting to keep the bull market moving higher that since the report and as of Nov. 5, the December Live Cattle are down over $3.00 per hundredweight (cwt), June 2013 Cattle are down $3.00 per cwt and January feeders are around $5.00 per cwt lower. If the report was bullish, why are markets down?
