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Jerry Klassen notes feeder cattle prices strengthened through fall 2017, leaving feedlot margins snug across weight classes. On December 1, 2017, the October live cattle futures traded about $10.52 under April, an inverted structure, while feeder futures stayed relatively flat.
He says the futures curve points to price direction over the next six to eight months.
The inverted live cattle curve and flat feeder curve signal the market expects softer fed cattle prices later in 2018. Feeders are priced out of line with fed cattle, which squeezes backgrounding and feedlot margins.
canadiancattlemen.caJerry KlassenJan 9, 2018Not enough comparable past events yet for a historical read.
Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
