A Literal Bull Market

Published on
April 18th, 2019
Duration
18 minutes

A Literal Bull Market

Trade Ideas ·
Featuring Shawn Hackett

Published on: April 18th, 2019 • Duration: 18 minutes

Shawn Hackett, president of Hackett Financial Advisors, predicted the outbreak of African swine fever and its potential ramifications on meat protein prices in an episode of Real Vision’s “Trade Ideas” six months ago. He now returns to review the enormous impact it's had on meat prices, highlights why this protein bull market is far from over, and discusses new trades to play the situation, in this interview with Jake Merl. Filmed on April 16, 2019.

Comments

Transcript

  • SL
    Steve L.
    20 June 2019 @ 02:41
    PPC update would be good. With the recent rally in corn, how will this affect PPC? Thanks
  • MM
    Michael M.
    5 June 2019 @ 19:00
    Any updates to the PPC idea since trade tariffs when imposed?
  • MO
    Martin O.
    27 May 2019 @ 23:13
    Shawn, thanks for taking the time to come back and bring us further up to date. Much appreciated on the level of information you did manage to squeeze into such a short interview. Thank you again.
  • OS
    Otmar S.
    3 May 2019 @ 12:34
    Good call. Thank you.
  • JW
    Joel W.
    19 April 2019 @ 22:20
    Thanks Shawn. I bought a ‘lottery ticket’ last year, and closed it for a small gain. I appreciate this update, new ideas on the theme, and your forecast for timing the trade. Please come back again in the 6th inning.
  • LW
    Luke W.
    19 April 2019 @ 15:42
    Ideas like this are why I subscribe, because I never would have come up with the idea myself. But here we have it broken down in a clear, concise way - understandable for someone who isn't an expert in ag commodities and actionable too.
  • TB
    T B.
    19 April 2019 @ 13:39
    The cattle supply situation is not discussed, but worth noting that April 1st Cattle on Feed (cattle supplies that will be available for slaughter) just hit a 20+ year high for the month of April.
    • SH
      Shawn H. | Contributor
      19 April 2019 @ 14:00
      The US and Brazil will continue to have strong cattle supply growth so the bull market in the prices for meat proteins in these areas is a demand-driven one set off by the Chinese need to replace lost pork supply. Also note that cattle supply growth in China, Australia and New Zealand in 2019 will be very limited.
  • SJ
    Stefan J.
    19 April 2019 @ 12:22
    Great trade idea!!!
  • SB
    Sunil B. | Contributor
    19 April 2019 @ 04:13
    China Pork prices are an essential part of CPI basket (& daily diet) and are highly correlated to CPI Index. NDRC said Consumer pork prices could go up 70% in H2. March Pork CPI is +5.1% YoY March) and domestic piglet prices are +90%. Inflation in China will more than likely add to Global Inflation numbers. This story clearly has macro implications
    • SB
      Sunil B. | Contributor
      19 April 2019 @ 04:20
      Apologies it is not NDRC but Ministry of Agriculture & Rural Affairs
  • SS
    Shanthi S.
    18 April 2019 @ 22:57
    You won’t catch me trading in the flesh of my friends. No doubt a good trade idea, but no thanks.
    • CR
      Cristian R.
      22 April 2019 @ 08:44
      Cows can use computers?
  • PC
    Peter C.
    18 April 2019 @ 19:48
    This is great stuff. Noticed Shawn never talked about Lean Hog futures. Very interesting in this environment he actually avoids hog.
  • HJ
    Harry J.
    18 April 2019 @ 17:00
    He doesn’t know much about how cattle are raised or the cattle market cattlemen live with daily. I’d rather spend the money going to Vegas. I think I’d have a better chance if winning. Bull S- - - -.
    • M.
      Milton .. | Founder
      18 April 2019 @ 17:28
      Harry, if you could be so kind and expand your position here with feedback we’d appreciate it. It’s important we keep debating in a respectable manner.
    • SH
      Shawn H. | Contributor
      18 April 2019 @ 18:14
      Certainly, we do not profess to know the nuances that you do with regards to running a cattle ranch. Our job is to price forecast Ag markets for hedgers and traders alike. That is a very different task. Time is always short to go over too much detail on Feeders, weaned calves, yearlings feedlots...
    • TT
      Trenton T.
      18 April 2019 @ 22:57
      Happy to host you next Wednesday at our 5th generation cow/calf operation about an hour from Park City, Utah, if you'd like to tip some cows. From a producer standpoint, I agree with the thesis and will consider a trade after talking to some feeder cattle buyers. Massive herd destruction in Nebraska is obvious. And if the African swine fever starts jumping borders, we may consider a position in HRL, based here in the US; the stock is trading below the 12/24/2018 level . . . yes, I'm advocating a SPAM long. SPAM may not be in the same league as a Bobby Van's ribeye, but it's pretty sterile, decent brand recognition in Japan, China and (South) Korea and has a very long shelf life.
  • WC
    William C.
    18 April 2019 @ 16:53
    Wow.
  • JL
    J L.
    18 April 2019 @ 11:13
    impressive stuff
  • IC
    Ibrahim C.
    18 April 2019 @ 10:56
    Shawn, thanks for this great interview. One of the good examples is to see your thesis is $SAFM.
  • SH
    Shawn H. | Contributor
    18 April 2019 @ 10:43
    In our November interview, we mentioned the risk to pork prices in the US should African Swine Fever be detected within the United States. That would cause US pork prices to crash as the export market would be shut down. But that would also cause panic buying of chicken and beef both domestically and internationally due to the reduced US pork export supply and the aversion to eating infected pork. Hence, why we do not like the pork market as an investment due to this risk and prefer poultry and beef.
  • Nv
    Nick v.
    18 April 2019 @ 10:36
    Brilliant. Thanks Shawn Hackett