Summer Slump for Cattle Futures May be Temporary

Cattle futures are said to be following their typical spring high to summer low trading pattern – albeit at much higher beef prices than just a few years ago – but there are signs prices can resume higher once the summer slump has passed. Feeder cattle futures are up today $0.575 cents per pound currently trading at $211.82 (CWT) at the Chicago Mercantile Exchange.

Feeder cattle prices from early April (to present) have fallen almost $22 per pound – a 13% drop in price – but in the five year period from 2010 to 2014 feeder cattle prices have averaged not quite a 10% drop in the same time period. Industry experts claim feeders may continue to drop until mid-August, but find some type of support thereafter.

Cattle (futures) prices are still high and the bigger than usual drop in price may reflect beef prices coming back to normal,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, regarding the fundamental assessment of the cattle futures markets. Taylor added, When beef prices are high the average consumer finds alternative meals to afford, or feed their family’s. This cattle situation is no different.”

Feeder cattle futures trend is down with no bottom yet in sight. In my study I find there is support coming in at $206.00 (CWT) which tells me feeder cattle futures can still slip lower from this current level.

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.