December 24, 2003

Beef Futures: They're What's for Sale

YEP. WE CALLED IT. From the Reuters news agency:

At the Chicago Mercantile Exchange, there was no interest in beef futures contracts, which fell the market limit of 1.5 cents, or 150 points.

"There's nobody willing to buy a contract," said Chuck Levitt of Alaron Trading Corp. "This is not going to stop until the contract has lost probably a thousand points."

With daily limits on how far prices can drop, Levitt said he thinks it will be next week before there is demand for beef futures contracts.

A 150 point fall is equivalent to a drop of 1.6 percent. That may not sound like much; but remember the volatility inherent there. Remember the leverage.

And if the market keeps falling ... well, just watch as the pain compounds.

Posted by Benjamin Kepple at December 24, 2003 05:19 PM | TrackBack