Playing the Protein Bull Market

Published on
September 3rd, 2019
Duration
11 minutes

Playing the Protein Bull Market

Trade Ideas ·
Featuring Shawn Hackett

Published on: September 3rd, 2019 • Duration: 11 minutes

Shawn Hackett, president of Hackett Financial Advisors, returns to Real Vision to provide an update on African Swine Fever and the ongoing bull market in meat protein. In this interview with Jake Merl, Hackett examines why pork prices are skyrocketing in China yet falling in the United States, reviews his trades from earlier this year, and discusses two new ways to play the situation. Filmed on August 30, 2019.

Comments

Transcript

  • cm
    carlos m.
    6 September 2019 @ 03:01
    Great, now the Chinese will import anything w/ 4 legs...or continue to clone dogs and cats...hard for me to invest in the slaughtering of 'protein' but good interview I suppose.
  • JT
    Jimmy T.
    4 September 2019 @ 14:13
    Oil
  • NA
    N A.
    4 September 2019 @ 14:01
    Great concise and useful info, thanks
  • CM
    Chris M.
    3 September 2019 @ 20:44
    As far as Seaboard, if you are a value person, looks like the time to pick it up is when the stock is trading closer to .50x sales. Today it is trading at .72x. Over the last 10 years, it has traded below .50x a total of four times. So if you can time the commodity pricing, it may work out, but doesn't look cheap from a value perspective.
  • CM
    Chris M.
    3 September 2019 @ 20:36
    Really like recommendations from stocks I normally do not follow. So thought this was an excellent interview. As far as WLMIY, this company's financials are complicated to read, particularly the income statement, and whose financial performance has been underwhelming. Looks like a total bet on commodity pricing and not one on a company that can grow.
    • SH
      Shawn H. | Contributor
      3 September 2019 @ 21:24
      Yes both recommendations are plays on both pork prices and edible oil prices rising over the next 12 months. Given that both are highly leveredged to their respective market pricing, any large increase in price of pork and edible oil will likely make current values look cheap in hindsight. I appreciate your well thought out comments.
  • MB
    MIKHAIL B.
    3 September 2019 @ 19:42
    I want more these kind of speakers on RV: clear articulation, no bs on politics.
  • PB
    Pieter B.
    3 September 2019 @ 19:09
    Great video! Thanks a lot!
  • NR
    Nathan R.
    3 September 2019 @ 17:52
    Do you have an opinion on Hormel?
  • CN
    Calvin N.
    3 September 2019 @ 11:11
    Shawn is great but last time he also suggested long cattle futures (in addition to PPC) which performed pretty bad , would love actually love to hear the reason behind that, is the trade war or corn price or others
    • SH
      Shawn H. | Contributor
      3 September 2019 @ 16:36
      It was actually a lottery ticket we called it on feeder cattle calls that did not work due to escalating trade war with China and a Tyson foods fire that shut off 6% of us beef processing capacity reducing the demand for cattle for slaughter.
    • ME
      Mark E.
      4 September 2019 @ 03:13
      Hi Sean, Do you see any recovery here in feeder cattle before oct 31 end? Feeder cattle at $132 currently. Any chance this could recover somewhat and if so, what would be a reasonable target, trying to mitigate some losses so any thoughts greatly appreciated indeed. Thanks Mark 🙏
  • YB
    Yuriy B.
    3 September 2019 @ 10:01
    I love Shawn's approach, but I lost him at one point during the interview. Could anyone please explain Shawn's logic here: "There's an opportunity a little further into the cycle and what it is, is because bean meal demand in China is down. Because if you have 35% less pigs to feed, you have less need for bean meal, which is a huge component. That means that you're crushing less soybeans to make meal, but the other component of crushing soybeans is soybean oil. By the very nature, that bean meal demand is going down and less crushes going on means that bean oil supplies are falling as a result, yet demand in China and in India and globally, is making record highs by the day." Specifically, if a major application of "bean oil" is to make feed for pigs. And the Chinese pig supply is down 35%. Then why is *usage* of bean oil "making record highs by the day." Another way to state my question is: can anyone more clearly articulate his bull case for Wilmar?
    • CN
      Calvin N.
      3 September 2019 @ 11:07
      Could be wrong but I guess bean meal and oil are 2 major outputs of the crushing, while meal is for feeding, the oil is for cooking and other food purposes and the demand for that is always there
    • KC
      Kenneth C.
      3 September 2019 @ 16:25
      i may be wrong but I would guess soybean oil is a by product of crushing soybeans for food consumption by pigs. So less crushing, less oil as a by product. Soybean oil might be used in cooking and other processes. question would be is soybean oil essential to those processes or was it a cheaper alternative. Thats my guesswork
    • SH
      Shawn H. | Contributor
      3 September 2019 @ 16:39
      Yes bean oil and bean meal are separate componentss of crushing soybeans. Meal is feed for pigs oil is for cooking food and used in many processed and baked food goods. Hence why meal demand down and bean oil setting records due to different uses. Sorry for not being more clear in interview.
    • YB
      Yuriy B.
      3 September 2019 @ 23:37
      Calvin, Kenneth, and Shawn - that makes sense. Thanks for clarifying!
  • DS
    David S.
    3 September 2019 @ 06:18
    Well presented. I like the different ways to invest with the same set up. DLS