Renewed Demand & Tight Supply Rally Cattle Futures

There is now the outlook that domestic US beef supplies are dwindling while demand increases.  This perception led cattle futures to their biggest rally in two weeks as this market tests its September highs.

USDA data reflects the average price for steers earlier this week was almost 2% higher than the week prior.  Also supporting higher cattle futures prices is meatpackers purchasing their animals this entire week to meet demand…just yesterday, it is reported 5% more cattle were processed than the week before.

The cash (cattle) price is much lower than the (cattle futures) price.  At some point the markets will come together and the higher priced (cattle) futures markets seem to be closer to the real price of cattle,” says Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current cattle futures situation.

The trend for cattle futures remains up with no top in sight.  We’re long cattle futures as they are just about $1 below record highs.

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