Cattle futures have seen values rise since the February low due to domestic beef consumption expected to be on the rise. June cattle futures, however, are “unchanged” for the day currently trading at $125.52 (per cwt) at the Chicago Mercantile Exchange.
The USDA reportedly says Americans are set to consume 54.3lbs of red meat this year – almost one-half pound more than last year – which will be the first increase seen since 2006. Just two years earlier, the US cattle-herd was the lowest in six-decades after prolonged drought in the south and southwest forced ranchers to curb their herds and sent beef prices soaring.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the cattle futures market by stating, “The pendulum does swing the other way.” Levy adds, “Cattle (futures) prices were so high ranchers did everything they could to add on to their herd, which has ultimately added to supply.”
Cattle futures trend, albeit technically up at this time, are at a crossroads. If the June Cattle futures contract were to take out Thursday’s low (124.32) without heading back up to the 127.00 benchmark first, then that would change the trend to down.
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