Cattle Futures Lower as USDA Warns on Beef Prices

Cattle futures are lower across the board today as US agriculture officials suggest exports, rather than domestic demand, offer the industries brightest prospects. June live cattle futures ended the day down $1.52 trading at $117.05 per cwt at the Chicago Mercantile Exchange.

The USDA acknowledged the seasonal tendency for beef prices this time of year with barbecue season on the rise, but on the other hand they also stated “both supply and demand fundamentals are bearish for the beef complex.” Recent beef output is shown to be up 4% year-on-year, and also contributing to the bearish outlook the number of cattle slaughtered up 2.5%.

Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the cattle futures market by stating,The cattle (futures) market was in bad shape coming into the year, and what rallies we have seen have been short-lived.” Plotkin adds,This (cattle futures) market can sure use increased exports as its fast approaching last year’s low with cattle on feed report reflecting 100.8% last month versus 100.9% of all last year.”

Cattle futures trend is clearly “down” with no bottom yet in sight (in my studies). Cattle futures should find support another dollar (per pound) lower, but in the meantime maybe we can all benefit by getting the grill in use a little early this year and take advantage of the falling beef prices.

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.