Tuesday, February 1, 2011

Time to get long cattle, multi year breakout

Cattle is the latest food commodity to breakout and move higher. I am getting long via the iPath Dow Jones UBS Livestock ETN (COW) which trades on the NYSE.

The catalyst for this is not only the continued money printing of the Benank FED but the fact that US cattle herds are at generational lows:

The U.S. cattle herd shrank to the smallest size in 53 years as of Jan. 1, as feed costs climbed and beef producers slaughtered more animals to take advantage of higher prices.

“There’s just very little incentive to hold back heifers and begin to build herds,” John Nalivka, the president of meat-consultant Sterling Marketing Inc. Vale, Oregon, said before the report. “Prices are high, and that caused a lot of beef cows to go to slaughter.”
This is not advice do your own due diligence.

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