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.

ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.