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Pro Traders Bullish on COW, Really!

Cahterine Holahan
Tuesday, 1 Feb 2011 | 11:56 AM ET

Hogs and heifers were on the mind of Fast Money trader Joshua Brown as commodity prices continued to surge Tuesday. Brown, Vice President of Investments at Fusion Analytics, was specifically watching the exchange traded funds that tracked the prices of lean hog futures, live cattle, and feeder cattle.

“COW -- a fund that is half hogs, half cows -- has just been a beast,” said Brown, referring to the UBS livestock ETN that is up nearly 17% from its 52-week low.

The price of futures contracts for all three were up more than 28% in the past year. Cattle futures hit a record of $1.66 per pound on Jan. 18.

Fueling the rising price of hogs and cows are shortages brought on, in part, by rising grain prices. As feed prices have surged, farmers have slaughtered cows earlier rather than let them grow into mature animals and breed, adding to their feed costs, said Brown. As a result, meat stocks are slim.

In fact, the U.S. cattle herd is at its smallest level in more than 50 years, according to the U.S. Department of Agriculture. The number of beef and dairy cows is down 1.4% from a year earlier, according to the most recent USDA report, released Jan. 28.

Low meat stocks are already impacting consumer prices. Last month, McDonald’s said it would raise prices this year because of higher costs.

Hogs & Heifers
A look at the trades in beef and pork.


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Trader disclosure: On Feb 2, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is short (IJR); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman's firm owns (AAPL); Finerman owns (BAC); Finerman's firm owns (BAC) leaps; Finerman's firm owns (BBY); Finerman owns (BP); Finerman's firm owns (BP); Finerman owns (C); Finerman's owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) and (JPM) leaps; Finerman's firm owns (JPM) and (JPM) leaps; Finerman's firm owns (MCD); Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman's firm owns (TGT); Cortes is long U.S. Treasuries; Cortes owns (TSN); Cortes owns (EXC); Cortes owns (MO); Cortes owns (PM); Cortes owns (GS); Cortes owns (MS); Cortes owns (SVU); Cortes is short (LVS); Cortes is short (BAC); Cortes is long U.S. Treasuries; Cortes owns (TSN); Cortes owns (EXC); Cortes owns (MO); Cortes owns (PM); Cortes owns (GS); Cortes owns (MS); Cortes owns (SVU); Cortes is short (LVS); Cortes is short (BAC)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (BAC)
Accounts Managed By Kanundrum Capital Own (EBAY)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (DBA)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (TLT)
Accounts Managed By Kanundrum Capital Are Short Australian Dollar
Accounts Managed By Kanundrum Capital Are Short The Yen

JOSHUA BROWN
Brown owns (AAPL) for clients
Brown owns (AIG) and for his clients
Brown owns (AMZN) for clients
Brown owns (ARMH) for clients
Brown owns (AXP) for clients
Brown owns (BA) for clients
Brown owns (BAC) for clients
Brown owns (BP) for clients
Brown owns (C) and for his clients
Brown owns (CSCO) for clients
Brown owns (F) for clients
Brown owns (FCX) for clients
Brown owns (GE) and for his clients
Brown owns (GS) for clients
Brown owns (GDXJ) for clients
Brown owns (GLD) for clients
Brown owns (HPQ) for clients
Brown owns (JPM) and for his clients
Brown owns (MSFT) for clients
Brown owns (MS) for clients
Brown owns (QCOM) and for his clients
Brown owns (VZ) for clients
Brown owns (WFC) and for his clients
Brown owns (COW) for clients

RICH ILCZYSZYN
Ilczyszyn Has No Disclosures

KEITH WIRTZ
Wirtz has no disclosures

KEVIN CRISSEY
Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from (UAL)
UBS AG, it's affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services from (UAL), (LCC) in next three months
(UAL) is an investment banking client of UBS Securities within the past 12 months
UBS AG, its affiliates or subsidiaries own 1% or more of a class of (UAL), (LCC) common equity
UBS Securities LLC is a market maker in (JBLU), (UAL), (LCC)
UBS Securities LLC is acting as an advisor to Continental Airlines on its announced agreement to merge with UAL Corp

ALEXANDRA LEBENTHAL
Lebenthal has no disclosures

RON SHAH
Shah has no disclosures

WILLIE WILLIAMS
Societe Genarale facilitates transactions in tradeable currencies

SCOTT NATIONS
Nations has no disclosures

FAST MONEY 360
Stifel Nicolaus is a market maker in (CVS)

GUY ADAMI FAST FIRE 12/21/2010
Adami had no disclosures in (JEF) on 12/21/2010

Comcast is the parent company of CNBC
Comcast is the parent company of NBCUniversal
GE owns 49% of NBCUniversal
GE owns 49% of CNBC

CNBC.com with wires.

  Price   Change %Change
MCD
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COW
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