truckin'
market vibes
October 24…)
“The trade you hate makes you money.” Anonymous
CPI was unexpectedly dovish.
In the news
Trump is taking action to relieve a supply squeeze in US beef production by raising the quota for Argentine beef from 20,000 metric tons to 80,000 metric tons annually, and this has stirred the Republican political pot with complaints in Texas about “lower-quality” foreign beef.
As of January 1, 2025, total US cattle inventories stood at 86.7 million head, down about 8% from the recent peak and the lowest level since 1951. Beef cow numbers specifically hit 27.9 million head, the smallest since 1961. The 2025 calf crop is projected as the lowest since 1941, leading to fewer feeder cattle entering feedlots. Fed cattle slaughter is forecast to drop by about 700,000 head in 2025 (Source: USDA).
CME live cattle futures, quarterly data
I don’t know a lot about the industry today, but during the GFC I had a job working as a sales guy on an ag desk in Chicago selling futures clearing to grain elevators and feedlots. My job covered a client list ranging from Indiana to the Wyoming line and from the Texas panhandle to Sioux City. I had an expense account, an Infinity FX-35 and a BlackBerry. The Midwest is a very beautiful part of the world.
It would take years to rebuild the herd and without higher prices that won’t happen. The reason I mention the cattle market, which is so out of my bailiwick, is that Trump is meddling in markets again and every time he does prices rip and crash and it gets very messy. Think gold and silver last fall. Copper last summer and oil … every other month. Pardon the pun, but he’s a bull in a china shop! Either he has bad advice or good advice and he doesn’t take it.
In the markets
It’s probably different this time in oil, gold and silver closer to balance, a new blue sky in the stock market and bitcoin still has wood to chop… plus the price of free in the vibe.
