Declining Beef Demand Pressure Cattle Futures

Cattle futures may be feeling the pressure of consumers opting for something other than beef.  Cattle futures have been at a standstill after a mid/late September run-up in price – making poultry or pork on the menu.

Gov’t data shows wholesale beef prices down 2.2% in the third-quarter, but pork dropping 7.2% and chicken breasts sliding 9% during the same period.  The cost of cattle for slaughter dropped a couple of cents per pound this week from last as I understand too.
           
Weak demand continues to pressure cattle (futures). However, demand has come back from the summer doldrums,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current cattle futures situation.  Craney added,Traders will continue to watch the demand picture along with the tight supply for support in the (cattle futures) market.”

Cattle futures trend is up with no top yet in sight.  Cattle futures (and livestock in general) are some of the few markets that do not tend to forewarn us of changes in trend – in my 20 year observation.  Looking for low-risk opportunities on the long-side…

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