00:22We've had a multi-year drought and other conditions that have kind of dwindled the herd here in the U.S.
00:28And, you know, on top of that, we're seeing the consumer shift towards eating beef.
00:35I mean, you know, you've probably seen if you've spent any time in social media, you see that there's an inclination to high-protein, low-carb diets, and beef is a staple in that.
00:45So there's all these things working together to push beef prices to all-time highs.
00:49And the consumer has thus far continued to pay it without really asking any questions.
00:55One thing to keep in mind is we generally don't see a spread.
00:58But I just mentioned how cheap grains were, so corn, soybean, wheat.
01:02Usually when there's cheap grains, that pulls the price of beef down because the idea is those cattle are being fed grains.
01:10And the price between those two assets should be more in sync than they are.
01:15This is, in fact, this is the widest price gap we've seen between those two assets ever, and it's not even close.
01:22So my personal opinion is we're probably in the last inning of this kind of chaotic deflationary move in grains and inflationary move in livestock.
01:31But I will tell you, as is always the case, markets can stay irrational longer than any of us can stay salt.
01:37So if we're in the last inning, does that mean beef prices are coming down or grain prices are going up?
01:45I think we're going to get a little bit of both.
01:47I'm more optimistic on beef prices coming down than grains going dramatically higher, although I think grains stabilize maybe inch higher.
01:54But on the beef side of things, there's a few things we look at in the futures markets.
01:58Well, there's many things we look at.
02:00But one thing I really focus on is seasonality.
02:04Usually this time of year, we start seeing peaks in beef prices, livestock prices.
02:08So seasonals are going to support a pullback here.
02:11But in addition to that, when I look at the COT report, that's the Commitment of Traders report.
02:15It tells us which types of traders are long and short and what magnitude.
02:21Speculators and hedge funds are sitting on the longest net long position in the history of feeder cattle.
02:28It's not even, again, not even close.
02:30It's wildly above anything we've ever seen.
02:33And we're seeing something similar, but maybe not quite as extreme in live cattle.
02:37So we're in a situation where the news is insanely bullish.
02:40It just keeps, you know, the bullish news just keeps coming.
02:44Everybody is long.
02:45All the big speculators, big traders and funds are wildly long, probably way too long for comfort.
02:53And at some point, there's going to be something that tips the scale and entices these people to liquidate.
02:59And when they do, I think the downside is going to be tremendous.
03:01They can take to the bottom spot.
03:06And if you go, you've got many surprises.
03:09So if you go, you could see what you've got to say in机's Monopoly.
03:11So if you haven't seen people get you to move on, they can get you to watch Police.
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