While most commodities had a sharp rise this week, cattle prices collapsed to a four-month low, trading under $1.23 per pound. Prices are plunging due to the cattle supply outweighing beef demand. Cold, rainy weather has discouraged would-be grillers, and bargain hunters are still preferring cheap pork over beef, forcing retailers to continue cutting prices for beef cattle.
Adding insult to injury, corn prices have been rising as cattle drop. Since grain is a livestock producerís main expense, ranchers are being slammed with industry-crippling rising costs and falling revenue.
Oil Prices Buoyed
Crude was near $26 per barrel just three months ago, and then quickly doubled to over $46 by Friday.
Though stockpiles on hand remain ominous, longer term investors are looking toward the day when demand will, once again, outpace supply. Exploration has come to a standstill, oil rigs are shutting down, and general spending on production facilities is continuing to plunge.
Meanwhile, major oil producer Venezuela could be forced to shut down oil drilling and refineries due to an electricity shortage.
Despite these bullish factors, some oil traders expect production to begin to rise again as prices near $50 per barrel, potentially sending the market back downward in a seesaw action.