Tuesday, November 15, 2011

Attention Madam Secretary of State: "Goldman Sachs lifts forecasts for cattle prices"

Hillary smiles as the newbies take on one of the toughest (and oldest) markets in the world.*
From Agrimoney:
Goldman Sachs, which last week lifted its forecasts for grain futures, has raised hopes for cattle too, citing the prospect of a slowdown in numbers of animals for slaughter but a further rise in demand.
Indeed, the bank rated livestock futures as a better bet than crop futures over the next 12 months, expecting gains of 10.5% in cattle and hog prices compared with a loss of 5.1% in the likes of corn, cotton and cocoa.
The forecast followed upgrades to forecasts for Chicago futures in live cattle, those already fattened, on three, six and 12-month time horizons.
"We expect a tighter live cattle balance in 2011-12 to support prices," Goldman Sachs said.
Supply squeeze
Supplies of live cattle ahead will be limited by "sharply lower" numbers of unfattened animals available for putting on feedlots, after southern ranchers, their pastures ravaged by drought, destocked this year, selling unusually-young cattle for fattening....MORE

Cattle futures started the year at a high and look to close the year a bit higher. Currently 120.80 for the December contract, 123.10 for February 2012. See also:

January 20, 2011 
After Trading at All-time High, What's Next for Cattle Futures?
June 24, 2011 
What's Mooving? "Live-Cattle Prices Surge " (higher prices for what's on your table)

*The Secretary of State famously ran $1000 to $100,000 in ten months of astounding cattle futures action:
"This is like buying ice skates one day and entering the Olympics a day later," 'says Mark Powers, editor of the Journal of Futures Markets. "She took some extraordinary risks."