Tight Supplies Extend High Cattle Futures Prices

Cattle futures continue two trade in a $3.00 trading range near 10-month highs on signs our domestic cattle supply is tightening.  Cattle futures are currently trading at $132.50 – $2.00 from their October $134.50 high, and $1.00 above last week’s (and last month’s) low.

USDA data shows meat-packers processing roughly 607K animals through last week.  When compared to animals processed just a week earlier, it’s a 2.3% decline – and from the same period last year it’s a full 4% reduction.
The cattle (futures) market may see choppy two-sided trading as beef prices remain weak along with demand. However, with expectations of a declining supply the foundation my already be built for strong price support,” says Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current cattle futures situation.  Craney adds,Traders will continue to monitor supply expectations as the primary driver.”

Cattle futures trend (in my work) is just now starting to roll over from an all out up-trend, to a downward bias.  I am standing by for feeder cattle futures to paint a more clearer picture of its intentions.


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