Cattle futures have put on the brakes on a market near its 15-month lows as data is emerging showing the number of animals going to feedlots has spiraled to an all-time low. Cattle futures traded down $1.50 per CWT to settle near $138.25 at the Chicago Mercantile Exchange.
Cattle used for meat raising usually get placed at feedlots to fatten-up before going to market, but the number of animals scheduled for feedlot placement fell almost 5.5% from the same time last year – the fewest since the USDA started record keeping in 1996. The feedlot population is reportedly just shy of 10M-head of cattle, which is actually more than 90K-head short of analysts expectations but still considered rather bullish for this market.
“The fewer number of cattle allotted for feeder operations traditionally signals tighter supplies ahead,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his assessment regarding the fundamental situation of the cattle futures markets. Evans adds, “Although cattle futures are near year-and-a-half lows, the volatile price action down here may be signaling this year’s forthcoming bottom.”
The trend for cattle futures is down with no bottom yet in sight. Cattle futures will have to demonstrate a halt of lower prices before a change in trend occurs, but let’s enjoy the low prices while we can.
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.