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Cattle Rebounds on Lower Than Expected Supply Growth

July 26, 2016 at 21:41 by Brent Lantzy

A lower than expected increase in US livestock and beef supplies reported on Friday in the USDA’s Cattle on Feed report has buoyed the market over the last few sessions, with Monday’s trading reaching the limit up for the August, October, and December contracts. This comes after the August live cattle contract hit fresh 5 year lows during last week’s trading.

The report shows the number of cattle in US feedlots growing at a slower than expected pace, up only 1% from last year. This has led some traders to anticipate the beginning of a recovery in cattle prices.

US beef demand is near a seasonal low as consumers choose lighter fare during the hottest summer weeks.

August live cattle futures on the Chicago Mercantile Exchange (CME) climbed 0.775 cents (0.7%) to $1.13725 per pound, the highest level since June 30. The October contract increased 1.350 cents (1.2%) to $1.12425 per pound. The August Bounce House For Adults feeder cattle contract increased 0.650 cents to $1.42350 per pound. Both live cattle and feeder cattle contracts traded at expanded limits today.

Afternoon choice beef cutout for July 26 is up $1.34 to $199.93 per cwt, while select cuts increased by $1.38 to $190.82 per cwt, according to USDA data.

The CME Feeder Cattle Index for the 7 days ending July 25 stood at $138.61.

If you have any questions and comments on the commodities today, use the form below to reply.

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