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1. I received information that not the entire plant of Tyson Foods was destroyed, but only part of it.
2. Currently beef packers are enjoying extremely good margins, and, thus, there is a strong incentive to produce as much meat as possible. Other producers will find ways to raise their capacities.
Thus, I think price for Live Cattle will move up again for the 2020 contracts. But they might not reacch the level of last week in the near future.
From what I have been reading, the number of cattle slaughtered this week isn't too much lower than what were slaughtered last week, so the reaction to the Tyson fire seems to have been overdone.
With this is mind, I went long the LEG20 contract today.
I wish I did. I read it in the Hightower report. They mentioned figures for the first 3 days of this week, and compared them to the same period last week.
Yes, I agree with this. It's not just hogs, but the equities also seem to be under the magic spell of a Trump tweet. The last 2-3 weeks have a been a roller-coaster for me as I trade a lot of SPX. Wide daily moves are now common place. It rose 80 points between Wed/Thur this week, causing me a lot of damage. One the one hand, I want to be careful of the Trump/China trade war, and on the other, no one really know how long this trade war will go on - it's been like this for around a year, and there seems to be no end-date. On a bigger picture, the US elections next year will be on the minds of both Trump and China, and I'm sure both parties will want to look like they have 'won' the war as the election fever is building up. This cat-and-mouse game could go on for a long while.
Meanwhile, I need to build up more trading experiences in commodities so am doing my trades on a small scale.
Meats are difficult to trade currently because of the uncertainties regarding purchases of the Chinese. In my opinion, downwards moves are overdone now. Thus, I entered the following positions:
