Cattle futures (feeders) have climbed over $12 (per cwt) in the past two weeks amid US & Brazil exchanging food safety documents to open beef trade. Feeder cattle futures are up $1.05 cent today currently trading at $145.80 per cwt at the Chicago Mercantile Exchange.
Just yesterday both governments reportedly food safety equivalence documents that is expected to open their respective markets to fresh beef exports – a boon for Brazil with $900M expected to boost that industry. Right now Brazil only exports beef from one part of the country, but this agreement opens up their whole country for exports and will be -by far- the world’s largest beef exporter.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the cattle futures market by stating, “Once the tee’s are crossed and the eiye’s dotted it could be a matter of 90 days before the US sees Brazilian beef exports come our way.” Brady adds, “There is speculation as much as 60,000 tons of imported beef could enter the country this year.”
The technical trend for cattle futures has recently emerged “up,” but for how long? Cattle futures continue to trade above $1.00 a pound which was unheard of only a decade ago, and with more beef in supply we may see a slide even lower as time passes – which will be a win for consumers.
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