Archive for the ‘Feeder Cattle Futures Trading’ Category

Summer Slump for Cattle Futures May be Temporary

Cattle futures are said to be following their typical spring high to summer low trading pattern – albeit at much higher beef prices than just a few years ago – but there are signs prices can resume higher once the summer slump has passed. Feeder cattle futures are up today $0.575 cents per pound currently trading at $211.82 (CWT) at the Chicago Mercantile Exchange.

Feeder cattle prices from early April (to present) have fallen almost $22 per pound – a 13% drop in price – but in the five year period from 2010 to 2014 feeder cattle prices have averaged not quite a 10% drop in the same time period. Industry experts claim feeders may continue to drop until mid-August, but find some type of support thereafter.

Feeder cattle futures trend is down with no bottom yet in sight. In my study I find there is support coming in at $206.00 (CWT) which tells me feeder cattle futures can still slip lower from this current level.

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Cattle Futures Rising Takes Ground Beef to Record Highs Last Month

Cattle futures have climbed back higher and apparently had taken ground beef prices with it to all-time record highs. The average price of ground beef almost hit $4.24 per pound, while feeder cattle futures have come within .10 cents of their all-time highs earlier this week at the Chicago Mercantile Exchange.

In August of last year the average price of ground beef topped $4 a pound for the first time, however, the Bureau of Labor Statistics (“BLS”) released revised data yesterday reporting the new record high for ground beef to be $4.238 per pound in February.

Cattle futures trend is up with no top yet in sight. I am looking to reset a long position that was offset just before Friday afternoon’s “cattle on feed” report with cattle futures now pulling back.

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E-Coli Concerns with Canadian Beef Recall Spikes Cattle Futures

Feeder cattle futures spiked higher this morning after a “limit-up” session yesterday most likely on the Canadian beef scare. The ag-company Cargill has recalled all ground-beef products sold in Wal-Mart stores (under the brand name “Your Fresh Market”) from British Columbia to Manitoba, but before realizing the entire situation cattle futures had spiked higher.

The good news for consumers is that no illnesses have been reported so far in the food-safety investigation underway while the 31,000lbs of beef packaged at Cargill’s Calgary, Alberta plant are being inspected. Cattle futures have since retreated $2.50 from their highs today.

Cattle futures trend remains “up,” but is at a crossroad. Cattle futures came very close to turning the corner (to “down”) last week until the Canadian-beef scare was realized over the weekend. These market require extra supervision lately…and I’m on it.

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Feeder Cattle Futures Suggests Animal Profits Steady Above $200 Per Head

Feeder cattle futures show no signs of backing off their record high prices set just last month and according to an industry expert, cattle feeding margins last week are topping out at a handsome $209 per head. Feeder cattle futures are currently trading at $2.3345 per pound (as of this writing) at the Chicago Mercantile Exchange – this is between the early October contract high of nearly $2.40 and last month’s low of $2.25725 per pound.

The beef experts went on to say feeding profits may be down $20 bucks per head from last month, but are $177 higher than this same time last year. Beef packers, however, claim they are experiencing long running negative margins and only seeing modest improvement of $8 per head – only realizing a $75 average loss per animal processed saying this is nearly double from only last month.

The trend for feeder cattle futures has resumed up only recently in my work. With the market currently testing last month’s contract high price, there is no bottom yet in sight.

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Higher Beef Prices Forthcoming with Record Reaching Cattle Futures

Cattle futures are signaling high beef prices to continue as the futures markets surge to new records. Feeder cattle is “limit-up” and live cattle futures are .37 cents from limit-up on the Chicago Mercantile Exchange as of this writing.

With the US domestic-herd shrinking to supplies not seen since the early 1950’s, the dwindling supplies have helped push beef prices to all-time highs. Bureau of Labor Statistics show ground-beef reaching a record $3.88 per pound last month and bone-less sirloin peaking out at nearly $7.69.

Increasingly larger demand for beef at record (beef prices) has caught the market by surprise. While supplies are much tighter than expected it’s even more of a surprise to see (cattle futures) demand hold firm at the elevated prices levels,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current cattle futures situation.

We are long feeder cattle futures from Friday with both a target price (218.62) and protective stop in place. Another limit-up day tomorrow and we could very easily realize our feeder cattle futures target.

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Higher Beef Costs Loom as Feeder Cattle Futures Extend Rally

Feeder cattle futures have soared to record highs and are poised for their biggest rally not seen since 1992. Beef prices are already at their highest ever, but with US ranchers sending fewer animals to slaughter, it can only mean higher costs for beef looming.

Recent USDA data shows the domestic feedlot-herd at this time last month actually shrank one-sixth of 1% from the same period as last year. Furthermore, for this past first-quarter, meat-packers processed 7% fewer heifers versus the same period as last year partially due in part by producers holding back more animals for herd-expansion purposes (which can take as long as three years).

Laura Taylor, a senior commodities broker at RJO Futures in Chicago, had this to say regarding the current feeder cattle futures situation, “The feeder cattle market has hit consecutive record highs this week, supported by a recent inventory report that indicated a smaller than expected number of calves and lighter-weight animals on-feed.”

The trend for feeder cattle futures is up with no top yet in sight. I made a big mistake exiting feeder cattle futures on Monday when I saw the market unable to retain it’s gains. I will need some type of pull-back before reinitiating another long position.

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Tight Supplies Extend High Cattle Futures Prices

Cattle futures continue two trade in a $3.00 trading range near 10-month highs on signs our domestic cattle supply is tightening.  Cattle futures are currently trading at $132.50 – $2.00 from their October $134.50 high, and $1.00 above last week’s (and last month’s) low.

USDA data shows meat-packers processing roughly 607K animals through last week.  When compared to animals processed just a week earlier, it’s a 2.3% decline – and from the same period last year it’s a full 4% reduction.
           
The cattle (futures) market may see choppy two-sided trading as beef prices remain weak along with demand. However, with expectations of a declining supply the foundation my already be built for strong price support,” says Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current cattle futures situation.  Craney adds,Traders will continue to monitor supply expectations as the primary driver.”

Cattle futures trend (in my work) is just now starting to roll over from an all out up-trend, to a downward bias.  I am standing by for feeder cattle futures to paint a more clearer picture of its intentions.

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