Posts Tagged ‘beef prices’

Feedlot Data Halts Cattle Futures Decline

Cattle futures have put on the brakes on a market near its 15-month lows as data is emerging showing the number of animals going to feedlots has spiraled to an all-time low. Cattle futures traded down $1.50 per CWT to settle near $138.25 at the Chicago Mercantile Exchange.

Cattle used for meat raising usually get placed at feedlots to fatten-up before going to market, but the number of animals scheduled for feedlot placement fell almost 5.5% from the same time last year – the fewest since the USDA started record keeping in 1996. The feedlot population is reportedly just shy of 10M-head of cattle, which is actually more than 90K-head short of analysts expectations but still considered rather bullish for this market.

The trend for cattle futures is down with no bottom yet in sight. Cattle futures will have to demonstrate a halt of lower prices before a change in trend occurs, but let’s enjoy the low prices while we can.


Australian Cattle Market at Record High Diverging with US Cattle Futures

Maybe cattle futures “down under” are lagging behind the US livestock market, but Australian cattle prices are hitting record highs as our domestic cattle market continues to slide from late last year’s highs. Feeder cattle futures for October delivery are trading down $4 (CWT) today currently at $1.955 per pound at the Chicago Mercantile Exchange.

So far the Australian cattle market has realized gains as high as 68% (YTD) over the past year at a time when US cattle futures are down about 10% for the year, and steer values in Brazil are seeing their lowest in the past five years. It was only this past October that US “live cattle” futures saw a record high of nearly $172.00 a pound (CWT) after animals were taken out of the beef production line and beef prices raised for the animals that were available.

Feeder cattle futures trend is down with no bottom in sight. Two weeks earlier feeder cattle futures was at a crossroads to test the highs of last year, but have failed miserably since. Back to “what is good for the consumer” as time passes…


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.


Cattle Futures Strengthening but Seasonal Tendency Coming Into Play

Cattle futures are coming off of fresh strength from last month and cattle feedlot managers may be able to squeeze out a few more bucks from the packers because of it. Feeder cattle futures are however, down today about 90 points and are trading at nearly $2.14 per pound at the Chicago Mercantile Exchange.

Cattle futures peaked late last year at the $2.32 level but have been making a run back to these highs since basing in February at the $1.90 support level. Cattle producers are looking to make the most they can before the cattle marketing season begins to seasonally increase.

Cattle futures trend is up (we trade “feeder” cattle” – animals preparing for feedlot use. The cattle futures market is still strong, but as mentioned above the seasonal tendency for beef prices is to decline into the mid-June time frame is fast approaching.


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.


Pork to Surpass Beef Production a First in 60 Years for Livestock Futures

High beef prices and rising demand for pork products as a cheaper alternative are setting the stage for beef to take a back-seat in production (for pork) for the first time since 1952. Both livestock animals have been hit hard lately with drought, high feed costs, and disease these last few years, but hog herds have rebounded sooner and circumstances have led to the breeding of more pigs and bigger animals.

The USDA estimates domestic pork output to increase 4.6% this year (to an all-time high) while at the same time cattle ranchers are still recovering from the 2012 drought that has brought cattle production into what will be a 22-year low. Just over a month ago, for the the fourth-quarter 2014, the USDA reported the breeding-sow herd posted the biggest increase since 1998 with the total hog population jumping 2% from a year earlier.

The trend for both cattle futures and hog futures are down with no clear bottom yet in sight. However, if last week’s lows hold in both feeder cattle and lean hog futures, then we can at least see some type of relief rally before another test of yesterday/today’s low.


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.


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.


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.


Cattle Futures at Record Highs, No Top Yet in Sight

Feeder cattle futures reached record highs yesterday at just over $2.10 per pound. Domestic ground beef prices are said to be up 76% in the past five years following a seven year decline in the US herd has left the fewest cattle since 1951 – USDA data shows.

There is speculation it may take at least three years to expand the herd to get supply in front of demand while the USDA claims the US will become a “net beef importer” in 2015. Expanding beef output will be no easy feat with the gestation period for calves being nine months and full grown animals taking as long as 22-months before reaching slaughter weight.

Short-term cash fundamentals look strong. The trend is still up. We watch this (cattle futures) market in awe,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current cattle futures situation.

Cattle futures up-trend shows no sign of relenting. I am patiently awaiting some type of pullback in feeder cattle futures prices to feel more confident about taking a position.

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