Cattle Futures Bullish Outlook

There is a current outlook surfacing that US beef supplies will not be able to keep up with demand.  Cattle futures may already be responding to this view as it seems to be finding support at these levels.

The USDA has reported just yesterday that wholesale beef is the highest its been in almost seven weeks, and that domestic beef production is expected to drop 4% this year.  This is after the US cattle-herd sunk to a 61-year low at the beginning of the year – according to the USDA.
            
Seasonable temperatures will bring about higher consumer demand for beef. Cattle supplies are well below average, and this is going to keep (beef) prices well supported as we go through the summer grilling season,” said Kevin Craney, a senior commodities broker at RJO Futures in Chicago, in a recent e-mail exchange, regarding the current cattle futures situation.  Craney added, “Look for higher (beef) prices as we get closer to summer.”

The trend for cattle futures has just turned up recently according to my work.  We are currently long cattle futures in anticipation of this new trend continuing to emerge.

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