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Live Cattle August 2013 (LEQ13)

119.075-0.150 (-0.13%) 5:00A EDT (CME)
Commodity Price Quote as of Thursday, May 23rd, 2013 View Help

Contract Specifications

Symbol LE
Name Live Cattle (LE)
Exchange CME
Trading Months February, April, June, August, October, December (G, J, M, Q, V, Z)
Trading Unit 40,000 pounds
Tick Size 0.025 cents per pound ($10.00 per contract)
Daily Limit 3.0 cents per pound ($1,200 per contract)
Trading Hours 9:05a.m. - 4:00p.m. Mon, 5:00p.m. - 4:00p.m. Tues-Thur, 5:00pm - 1:55p.m. Fri CST
Last Trading Day The last business day of the contract month
Value of one futures unit $400
Value of one options unit $400

CRB Yearbook Description

The beef cycle begins with the cow-calf operation, which breeds the new calves. Most ranchers breed their herds of cows in summer, thus producing the new crop of calves in spring (the gestation period is about nine months). This allows the calves to be born during the milder weather of spring and provides the calves with ample forage through the summer and early autumn. The calves are weaned from the mother after 6-8 months and most are then moved into the "stocker" operation. The calves usually spend 6-10 months in the stocker operation, growing to near full-sized by foraging for summer grass or winter wheat. When the cattle reach 600-800 pounds, they are typically sent to a feedlot and become "feeder cattle." In the feedlot, the cattle are fed a special food mix to encourage rapid weight gain. The mix includes grain (corn, milo, or wheat), a protein supplement (soybean, cottonseed, or linseed meal), and roughage (alfalfa, silage, prairie hay, or an agricultural by-product such as sugar beet pulp). The animal is considered "finished" when it reaches full weight and is ready for slaughter, typically at around 1,200 pounds, which produces a dressed carcass of around 745 pounds. After reaching full weight, the cattle are sold for slaughter to a meat packing plant. Futures and options on live cattle and feeder cattle are traded at the Chicago Mercantile Exchange. Both the live and feeder cattle futures contracts trade in terms of cents per pound.

Prices - Live cattle futures prices began 2011 on a firm note and trended higher into April 2011 when they posted a then record high of $1.22875 a pound. Tight supplies pushed prices higher as the USDA's Jan 2011 bi-annual cattle report showed the US cattle herd as of Jan 1, 2011 at 92.582 million head, the smallest since 1958. Another major bullish factor was the catastrophic earthquake in Japan in March 2011 that damaged the Fukushima nuclear plant and caused Japan to boost its imports of U.S. meats due to radiation contamination of its food supply. Live cattle prices tumbled into mid-year and in May 2011 posted a 1-1/4 year low of $1.00750 a pound as a persistent drought in the Great Plains scorched pastures and prompted ranchers to move cattle out of pastures and to slaughter. The Aug 2011 Cattle on Feed report showed feedlots purchased 2.153 million head of cattle in July 2011, the most for a July since USDA data began in 1996. This temporary boost in supplies was easily absorbed by continued strong foreign demand as 2011 US beef exports rose +21% y/y. Live cattle prices strengthened into year-end and posted an all-time high of $1.25575 a pound in December 2011, the highest since cattle futures trading began in 1964, and finished the year at $1.2290, up +13.9%.

Supply - The world's number of cattle as of January 1, 2012 rose +0.6% to 1.017 million head, which is below the decade high of 1.029 million. As of January 1, 2012 the number of cattle and calves on farms in the U.S. fell -2.1% to 90.768 million, which was the lowest level since the 1952 figure of 88.072. World production of beef and veal in 2011 fell -0.3% to 56.848 million metric tons (carcass weight equivalent). The USDA is forecasting that world production will be virtually unchanged at 56.798 million metric tons in 2012. U.S. commercial production of beef in 2011 fell -0.1% to 26.277 billion pounds.

Demand - World consumption of beef and veal in 2011 fell -0.7% to 55.834 million metric tons. The USDA is forecasting a further drop of -0.3% in 2012 to 55.649 million metric tons. U.S. consumption of beef and veal in 2011 fell -2.4% to 11.750 million metric tons. The USDA is forecasting a further drop of 5.0% in 2012 to 11.158 million metric tons.

Trade - U.S. imports of live cattle in 2011 fell -7.7% to 2.107 million head, but remained well above the low levels seen when mad cow disease caused the U.S. to close the Canadian border to live cattle in 2003. U.S. exports of live cattle in 2011 rose +109.2% yr/yr to 190.538 head, an eight year record high. By weight, U.S. imports of beef in 2011 rose +11.7% to 2.029 billion pounds. U.S. exports of beef in 2011 rose +20.3% to 2.765 billion pounds, a new record high.

Articles from the Commodity Research Bureau (CRB) Commodity Yearbook. The single most comprehensive source of commodity and futures market information available, the Yearbook is the book of record of the Commodity Research Bureau, which is, in turn, the organization of record for the commodity industry itself. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope is second to none. Additional information can be found at www.crbyearbook.com.
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