Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm Programming Radio Oklahoma Network  |  7401 N. Kelley Ave. Oklahoma City, OK 73111  |  (405) 841-3675  |  Fax: (405) 841-3674

advertisements
   
   
   
   
   
   
   
   

Agricultural News


What's Really the Underlying Issues Causing Market Volatility - Dr. Derrell Peel May Have the Answer

Wed, 08 Mar 2017 12:36:22 CST

What's Really the Underlying Issues Causing Market Volatility - Dr. Derrell Peel May Have the Answer


Problems with transparency, liquidity, volatility, etc. have challenged cattle markets for some time now. One problem that has been around for a few years and is in recent months even more prevalent is the convergence issue, which has allowed the futures market to align with the cash market by the time a particular contract is settled. According to Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel, who spoke recently with Radio Oklahoma Ag Network Farm Director Ron Hays, some of the more recent trade has exacerbated the convergence problem.


“We’ve talked a lot about volatility in the futures market both live and the feeder cattle contracts,” Peel recounted. “And of course, the markets have been playing catch up to this some what stronger than expected cash market. February live cattle futures just went off the board really struggling to catch up and not really reflecting that stronger cash market until the bitter end.”


Peel explains that when taking those February prices relative to where the summer months are priced, he says we have an extraordinarily large discount priced into the live cattle market.


“It’s already showing a significant drop from now until the April in the April contract,” he pointed out. “That in my mind, will be a little bit bigger discount than is really warranted, but the market knows that we do have more beef production coming.”


Peel believes a combination of fundamental issues are behind this, but also believes there are more structural problems at the core of the situation. He says this is causing the futures market to be much less effective for producers as a risk management tool.


Listen to Peel explain to Hays the underlying issues beneath the convergence of the markets, on today’s Beef Buzz.


The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.




   





   

Listen to Peel explain to Hays the underlying issues beneath the convergence issue in the markets
right-click to download mp3

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Oklahoma Ag Groups Praise EPA Administrator Scott Pruitt for Pulling the Plug on WOTUS  Tue, 27 Jun 2017 17:08:55 CDT
  • Steer and Heifer Calf Prices Hold Steady This Week at OKC West Livestock Auction in El Reno, Okla.  Tue, 27 Jun 2017 16:16:10 CDT
  • Congressman Frank Lucas Happy to See WOTUS on Its Way Out the Door of a Refocused EPA  Tue, 27 Jun 2017 16:03:37 CDT
  • The National Cattlemen's Beef Association Calls on Trade Officials to Practice Caution Regarding NAFTA Negotiations  Tue, 27 Jun 2017 15:53:12 CDT
  • Corn Growers Association Reacts to the EPA's Decision to Repeal the Waters of the US Rule  Tue, 27 Jun 2017 15:43:34 CDT
  • National Pork Producers Council Cheers EPA's Proposed Rule to Repeal WOTUS  Tue, 27 Jun 2017 15:29:49 CDT
  • House Ag Chairman Michael Conaway Hails WOTUS Repeal as an End to Government Power Grabbing  Tue, 27 Jun 2017 15:21:16 CDT
  • American Farm Bureau President Zippy Duvall Applauds EPA's Move to Ditch Flawed WOTUS Rule  Tue, 27 Jun 2017 15:10:15 CDT

  • More Headlines...

    Ron salutes our daily email sponsors!

    Livestock Exchange Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit P&K Equipment Tulsa Farm Show Stillwater Milling American Farmers & Ranchers KIS FUTURES, INC. Oklahoma Cattlemen's Association

    Search OklahomaFarmReport.com


       
       
    © 2008-2017 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup

    WebReady powered by WireReady® NSI