Cattle futures are coming off of fresh strength from last month and cattle feedlot managers may be able to squeeze out a few more bucks from the packers because of it. Feeder cattle futures are however, down today about 90 points and are trading at nearly $2.14 per pound at the Chicago Mercantile Exchange.
Cattle futures peaked late last year at the $2.32 level but have been making a run back to these highs since basing in February at the $1.90 support level. Cattle producers are looking to make the most they can before the cattle marketing season begins to seasonally increase.
“Even though feeders have been strong this past month, it doesn’t mean the average cattle rancher is reaping the full potential profit,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental analysis regarding the current cattle futures situation. Evans added, “Cattle coming off feed recently and animals being harvested in the next few weeks are feeders that were purchased at record prices, so on a cash-to-cash basis the rancher needs prices to remain high to realize a respectable profit.”
Cattle futures trend is up (we trade “feeder” cattle” – animals preparing for feedlot use. The cattle futures market is still strong, but as mentioned above the seasonal tendency for beef prices is to decline into the mid-June time frame is fast approaching.
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.