Feeder Cattle Aug '18 (GFQ18)
|Tick Size||0.025 cents per pound ($12.50 per contract)|
|Daily Limit||4.5 cents per pound ($2,250 per contract) Expanded limit 6.75 cents|
|Contract Size||50,000 pounds|
|Trading Months||Jan, Mar, Apr, May, Aug, Sep, Oct, Nov (F, H, J, K, Q, U, V, X)|
|Trading Hours||8:30a.m. - 1:05p.m. CST|
|Value of One Futures Unit||$500|
|Value of One Options Unit||$500|
|Last Trading Day||The last Thursday of the contract month|
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 CME Group. Both the live and feeder cattle futures contracts trade in terms of cents per pound.
Prices - CME live cattle futures prices (Barchart.com electronic symbol LE) began 2014 at a then-record high of $1.34500 per pound and continued higher to post a new record $1.53000 a pound in Feb 2014 as cattle supplies remained tight. The USDA's semiannual cattle inventory report released on Jan 31, 2014 showed that the U.S. cattle herd shrank by 1.8% yr/yr as of Jan 1, 2014 to a 63-year low of 87.7 million head. The USDA estimated that U.S. 2014 beef output would fall 5.3% yr/yr to 24.43 billion pounds, the lowest since 1994, as cattle supplies were still reeling from the 2012 drought in the Great Plains that prompted cattle ranchers to cull their herds. Cattle prices then fell back to the low for the year of $1.35400 in May 2014 as record-high retail beef prices decimated domestic beef consumption. The sell-off in cattle prices was short-lived, however, as beef supplies remained tight and cattle prices rallied into Oct 2014 and posted a record high $1.71975 a pound, the highest since cattle futures trading began in 1964. Fewer cattle were coming to market, which kept beef supplies low, as the Sep 2014 Cattle on Feed report showed feedlot cattle sales, or marketings, totaled 1.69 million head as of August 31, 2014, down -9.6% yr/yr and the lowest for an August since data began in 1996. Domestic beef demand was sharply curtailed due to record high prices and cattle prices fell back the rest of the year and finished 2014 up +23.2% yr/yr at $1.65700 a pound.
Supply - The world's number of cattle as of January 1, 2014 rose +3.8% to 1.029 million head. As of January 1, 2014 the number of cattle and calves on farms in the U.S. fell -0.9% to 88.526 million, which was the lowest level since the 1952 figure of 88.072. World production of beef and veal in 2014 rose by +0.3% to 59.598 million metric tons (carcass weight equivalent). The USDA is forecasting that world production in 2015 will fall by -0.1% to 18.739 million metric tons in 2014. U.S. commercial production of beef in 2015 is predicted to fall -1.7% to 23.830 billion pounds.
Demand - World consumption of beef and veal in 2014 rose +0.2% to 57.834 million metric tons. The USDA is forecasting a -0.2% decline in world consumption of beef and veal in 2015 to 56.884 million metric tons. U.S. consumption of beef and veal in 2014 fell -3.4% to 11.215 million metric tons. The USDA is forecasting a drop in U.S. consumption of beef and veal of -2.4% in 2015 to 10.944 million metric tons.
Trade - U.S. imports of live cattle in 2014 rose +11.8% to 2.272 million head. U.S. exports of live cattle in 2014 fell -35.0% yr/yr to 107,172 head, below the 2011 record high of 194,108 head. By weight, U.S. imports of beef in 2015 are projected to fall -5.2% to 2.700 billion pounds. U.S. exports of beef in 2015 are projected to fall -2.3% to 2.525 billion pounds, just below the 2011 record high of 2.779 billion pounds.
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. More commodity data from Commodity Research Bureau.
More commodity data from Commodity Research Bureau.