Where are commodities heading to? Beyond 2022
Where are the meat or commodity prices heading?
Meat prices have been rising at a rate of about 3% per annual over the last 40 years.
Meat is what I classified as an edible commodity, so is corn, wheat and rice. And as these commodities start picking up in prices, they are the one that will give the central banks a huge headache and to consider to hike its interest rates than the other commodities in the CPI basket.
Why is this so?
In short, people can still live with some inconvenience without cars or petrol, but not without food. Therefore, there is an urgency for the policy makers to first take care of the basic needs of the people.
Content:
. Long-term direction of Live Cattle
. Trading ideas
. Investing ideas
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
A little hack here to project the coming CPI data and also to know how aggressive the Fed will be with interest rate hike - you may consider to track the development of these edible commodity prices, if it is still trending up, we should be expecting a higher CPI and interest rates.
Example on Live Cattle Futures:
0.025cts = US$10
0.10cts = US$40
145.00 = 1450 x US$40 = US$58,000
From 144 to 145 = US$400
Meat prices have been rising at a rate of about 3% per annual over the last 40 years.
Meat is what I classified as an edible commodity, so is corn, wheat and rice. And as these commodities start picking up in prices, they are the one that will give the central banks a huge headache and to consider to hike its interest rates than the other commodities in the CPI basket.
Why is this so?
In short, people can still live with some inconvenience without cars or petrol, but not without food. Therefore, there is an urgency for the policy makers to first take care of the basic needs of the people.
Content:
. Long-term direction of Live Cattle
. Trading ideas
. Investing ideas
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
A little hack here to project the coming CPI data and also to know how aggressive the Fed will be with interest rate hike - you may consider to track the development of these edible commodity prices, if it is still trending up, we should be expecting a higher CPI and interest rates.
Example on Live Cattle Futures:
0.025cts = US$10
0.10cts = US$40
145.00 = 1450 x US$40 = US$58,000
From 144 to 145 = US$400
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Disclaimer
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