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Tuesday, July 22, 2014

Cattle Charge Higher

Posted Monday, August 23, 2010, at 11:49 AM

Cattle prices rose sharply this week as meat packers bought beef in preparation for Labor Day grilling demand. October live cattle futures reached $1.00 per pound on Thursday morning, a record price for that contract. Cattle prices have leapt nearly 15% over the last two months, following corn and soybean prices higher. Both corn and beans are primarily used as animal feed in the United States, with 43% of corn and 98% of soybeans being fed to animals. Over the last two months, corn prices have risen 25% while beans climbed 13%, reducing profit margins for livestock producers.

There are thoughts throughout the cattle industry that cattle and beef prices could fall sharply once Labor Day demand has been satiated. As of midday Friday, October live cattle futures were trading at 99.25 cents per pound.

Coffee Stays Energized

Coffee prices rose to a new 12-year high, reaching $1.82 per pound on Friday morning. The market has been driven primarily by supply concerns from the world's top producers, Columbia and Brazil. Those two nations produce nearly half of the world's coffee and have recently been suffering from heavy rains, which can damage the sensitive coffee "cherries" that hold the immature coffee beans.

For now, American consumers may have to accept paying higher prices for their daily caffeine fix as coffee prices have perked 38% over the last three months.

US Dollar Up, Euro Down

With global equities lower this week, investors sought the perceived refuge of the US dollar over the Eurocurrency, sending the Euro to a 1-month low at on Friday morning. The Eurocurrency was further damaged by a European Central Bank statement that indicated that growth prospects remained grim across Europe. As of midday Friday, the Euro was trading at $1.27, down 0.5%



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Commodity Futures File
Alex Breitinger
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Alex Breitinger, a 2009 graduate of DePauw University, is a commodity futures broker with Breitinger & Sons, LLC in Valparaiso. He can be reached at 800-411-FUTURES (3888) or online at www.indianafutures.com.
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