Cattle Futures Update
On January 9th, the February live cattle futures contract pushed down to the lowest level since September 18th 2017.
If you unfamiliar with cattle futures, the live cattle contract is used for fat cattle and is 40,000 pounds.
The other futures contract is for feeder cattle and is 50,000 pounds.
This year is setting up on the futures somewhat like last.
Last year February live cattle bottom around $120 and then ended in April around $140.
I’m not sure if this year is setting up the same as last, but this is looking like a bit of a bottom for cattle.
Cattle futures typically tend to peak around March/April.
Another supporting factor is 1st quarter beef production is expected drop from the 4th quarter of 2017.
The difference is this production drop has reported to possibly be more than normal, which could help support an increase in the futures.
I’m going to be considering strategies to replace cattle that clients have sold, or waiting for higher prices and protecting on the upside.
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