Meat market: what shall traders expect?

Stock exchange news. Live Cattle. Last Thursday the prices of live cattle showed the signs of strength. This was first of all connected with the increase of demand, resulted from improvement of weather conditions in the USA. This increase was short because the markets of goods are generally weak. The increasing dollar rate has also had a negative impact on prices.

Futures price of live cattle with supply in June and August is lower than the price of spot market; seasonal descending tendency is not over yet. Current prices are in the range of 110.5$-108.5$.

In general, the descending movement is going to be continued at the market on arrival of support and fixed level of 108.5$ (June futures). On arrival to 110.5$ level, the beginning of a short-term ascending tendency can be discussed. Correction of petrol prices can support the prices on cattle. According to reports of USDA, the spread of seasonal trend is yet to come; however, there already exist first grounds to it. The direction of price is currently dependent on weather, dollar rate, and trends on the markets of goods.

Weekly slaughter amounted to 653,000 heads, which is 4,000 heads less than last week’s numbers and 21,000 heads less than last year’s numbers. Beef production amounted to 494 million pounds, which is 3.3 million pounds lower than last week’s numbers and 14.5 million pounds less than last year’s numbers.
 

Lean Hogs. Prices of lean hogs show growth. Improvement of weather conditions in the USA and correction of petrol prices have positive impact on demand. The difference between spot and futures price shall favour the increase of the price of lean hogs.

The beginning of ascending seasonal tendency can already be discussed, but weak trade markets and strong dollar can put the prices under pressure. Fixing the level lower than 92$ (June futures) is unlikely, as it can only be caused by environmental factors. If the weather conditions improve, the further growth of demand can be expected.

Weekly slaughter amounted to 1978 thousand heads, which is 11 thousand heads less than last week’s number and 20 thousand heads less than last year’s number. Lean hogs production amounted to 411 million pounds, which is 2.1 million pounds less than last week’s number, but 11.9 million pounds more than last year’s number.
 

The Chair of Derivatives Trading  of Masterforex-V Academy.