Cattle futures slid $25 from their June highs, but the $9 retreat may be signaling a beef price turnaround. Cattle futures are down .38 cents per pound currently trading at $137.20 (CWT) at the Chicago Mercantile Exchange.
Feeder cattle has reportedly been trading at a $6 to $10 basis higher than the live cattle contract in the last week all the while feeders have been in topsy-turvy trading these past couple of months. Weighing on finished cattle prices however, may be heavier weights as well as slower beef demand (because of much more affordable pork prices).
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shares his view regarding the fundamental situation of the cattle futures markets by stating, “The turnaround in cattle (futures) prices last week is an initial sign that things may be improving for cattle producers.” Craney added, “Another sign that cattle (futures) prices may be stabilizing is similar movements in the deferred cattle (futures) contracts.”
The trend for cattle futures is still technically “down,” however at a crossroads. If the December cattle futures were to take out yesterday’s high ($138.87) before trading back down to the $135.20 moving average, that would reverse the trend in my work.
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.