Feeder cattle futures show no signs of backing off their record high prices set just last month and according to an industry expert, cattle feeding margins last week are topping out at a handsome $209 per head. Feeder cattle futures are currently trading at $2.3345 per pound (as of this writing) at the Chicago Mercantile Exchange – this is between the early October contract high of nearly $2.40 and last month’s low of $2.25725 per pound.
The beef experts went on to say feeding profits may be down $20 bucks per head from last month, but are $177 higher than this same time last year. Beef packers, however, claim they are experiencing long running negative margins and only seeing modest improvement of $8 per head – only realizing a $75 average loss per animal processed saying this is nearly double from only last month.
“We’ll most likely see high prolonged beef prices until the domestic herd is brought up to former levels where supply met demand. I understand this may be as long as two-three more years according to beef authorities,” stated Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his insight regarding the current feeder cattle futures situation.
The trend for feeder cattle futures has resumed up only recently in my work. With the market currently testing last month’s contract high price, there is no bottom yet in sight.
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.