Cattle futures are signaling high beef prices to continue as the futures markets surge to new records. Feeder cattle is “limit-up” and live cattle futures are .37 cents from limit-up on the Chicago Mercantile Exchange as of this writing.
With the US domestic-herd shrinking to supplies not seen since the early 1950’s, the dwindling supplies have helped push beef prices to all-time highs. Bureau of Labor Statistics show ground-beef reaching a record $3.88 per pound last month and bone-less sirloin peaking out at nearly $7.69.
“Increasingly larger demand for beef at record (beef prices) has caught the market by surprise. While supplies are much tighter than expected it’s even more of a surprise to see (cattle futures) demand hold firm at the elevated prices levels,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current cattle futures situation.
We are long feeder cattle futures from Friday with both a target price (218.62) and protective stop in place. Another limit-up day tomorrow and we could very easily realize our feeder cattle futures target.
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