Posts Tagged ‘livestock markets’

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.

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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…

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Cattle Futures Just Off Highs of the Year

Feeder cattle futures have been hovering at these levels for the better part of this month, but are having difficulty following through above $2.20 per pound let alone come close to challenging last year’s highs. The August feeder cattle contract closed down 120 points at $2.17 per pound at the Chicago Mercantile Exchange.

Feeder cattle “asking” prices have been reported to range nearly $100 per hundred-weight depending on what part of the country you’re in, but at the CME they have only been fluctuating between $2-$3 dollars in the past five weeks. Cattle futures may have picked up in the number of slaughtered animals this week, but is still well behind the pace of this time last year.

The trend in cattle futures is up, albeit with little follow-through on higher highs three times this month. The cattle futures market has been teetering back and forth for the past two months and I’m sidelined from this market until a clearer picture emerges.

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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.

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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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Hog Futures: The Only Commodity to Fall More Than Oil

Despite energy and gold dominating the news wires recently, lean hog futures are the one commodity that has actually fallen MORE than crude oil. Lean hog futures are actually up 40 points at the Chicago Mercantile Exchange (as of this writing), but in the overall scheme of things the hog market has actually plummeted over 51% since the end of last June.

“Lean hog” (futures) – the market-term designating butchered pigs regardless of size – have only sunk in price after reaching record highs last summer after a terrible disease decimated supplies. Thankfully to the credit of resourceful pig farmers, once the virus ran its course more hogs made it to the market and the USDA projects a 5.5% rise in pork production this year at a time of slowing int’l demand.

The trend for hog futures is down with no clear bottom yet in sight. All lean hog rallies should be viewed as opportunities to get in on the short side – which is where I’m at.

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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.

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Cattle Futures Finding Support as News of Beef Imports Increasing

Cattle futures have paused at recent highs from early October as news of the US domestic herd is updated – and it’s not looking good. Exports of beef to the US is reportedly jumping 35% for the 2014-2015 fiscal year to amounts not seen since 2004-2005 (according to a recent report from the Australian Bureau of Agricultural & Resource Economics and Sciences).

If you may recall from previous postings, the US cattle herd started the year at a record-low number of animals not seen since 1951 after prolonged years of drought forced cattle ranchers to cull their herds. This will help the Australian beef industry significantly as they are already reporting as much as 35% of their exports going to US dinner tables.

The trend for cattle futures is up with no bottom yet in sight. This cattle futures market is one where we must trade with caution in light of the limit up/down days we have been seeing in recent trading sessions.

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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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Cattle Futures at Crossroads with Greener Pastures Signaling Beef Rebound

In America’s heartland, there are developments signaling a changing situation with US beef supplies as the grazing pastures turn greener. The recent rains may be attributed to turning the cattle futures markets into full retreat – but only time will tell.

Drought and cattle selloff at markets all around the nation have put the domestic-herd at a 63-year low, but pasture conditions are said to be mostly recovered from the 2012 originated drought that forced ranchers to sell-off their inventory of animals. Cattle futures are already showing signs of “topping” after reaching record highs highs just last month.

Laura Taylor, a senior commodities broker at RJO Futures in Chicago, shared her insight regarding the current cattle futures situation by stating, “…packer profit margins improved on the recent break and this might slow or stop the steep decline in cash prices see over the past several weeks.”

Although cattle futures trend is technically “up,” I am seeing the first signs of divergence at these levels. If feeder cattle futures continue downward and take out last week’s low (2.1107), I will have to reverse my thinking.

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