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.

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.