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Live Cattle Trading
Live Cattle Trading Defined and Explained
The live cattle futures contract reflects current supply and demand for feed cattle, prices of competing meats and the cost of feed grains, along with long-term cyclical patterns for meat supply and consumer preferences. The live cattle futures contract revolves around a non-storable commodity live cattle. The live cattle contract has proven to be an important tool for both cattle producers and packers to effectively manage price risk. The seasonal aspects of meat production, cyclical aspects of the cattle industry and consumer's desire for meat products make the contract an attractive contract to trade. Live Cattle Market InvestingThose interested in investing in live cattle should first spend a significant amount of effort gathering information. A large percentage of live cattle futures traders are involved with the beef industry and trade futures as a way to stabilize price fluctuations. The beef business is quite involved and has evolved as technology increasingly enters the cattle market. New investors should not expect to find one book to answer all their questions about beef production and the idiosyncrasies of trading. In the case of live cattle futures, traders should also be aware of the intricacies of physical delivery of cattle and the various premium or discount levels involved in delivery if they intend to trade the live cattle spot month contracts. Live Cattle Trading Prices & RatesLive cattle futures are traded at CME Group.
See how VantagePoint Software can predict the Live cattle market with up to 86% accuracy* - Get your free live cattle report now. Live Cattle Trading Supply InformationLive cattle futures pick up where feeder cattle leave off. Feeder cattle are typically those younger cattle that graze pastures or wheat or are fed hay until they weigh about 600 to 800 pounds. Then they are placed in feedlots, where they receive higher concentrations of feed rations that may include corn silage; a feed grain such as corn, milo or wheat, depending on feed grain prices; soybean meal for protein, and alfalfa, clover or some other type of hay. The live cattle eligible for delivery on the live cattle futures contract remain in the feedlot for 5-6 months and gain another 500 pounds, becoming the live cattle traded. Live cattle are usually slaughtered at 1,200-1,300 pounds, producing a dressed carcass of about 750-800 pounds. The seven major live cattle producing states are Arizona, California, Colorado, Iowa, Kansas, Nebraska, and Texas, which provide most of the statistics of interest to the live cattle futures trader. Live Cattle Trading Trading TipsReports of mad cow disease or a meat recall due to an e-coli or salmonella threat can disrupt live cattle prices, frequently involving a sharp panic sell-off initially and then a recovery as the extent of the problem usually is not as great as feared at first. There can be longer-term consequences for live cattle prices if an episode is severe enough to affect consumer opinion about meat choices or if consumers decide to change their eating habits due to some diet fad.Live cattle have also been the focal point of some trade negotiations, particularly with Japan and South Korea. Although most live cattle trading issues are domestic, beef exports have grown enough to affect live cattle prices and get traders attention, and word that a beef shipment has been rejected for some reason or that a nation has agreed to resume beef imports can have price repercussions.
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Softs Jim Wyckoff, Senior Analyst, TraderPlanet.com July sugar closed down 41 points at 15.44 cents yesterday. Prices closed near the session low on profit-taking pressure. The key "outside markets" were mixed for the sugar futures market yesterday, as the U.S. stock indexes were steady-higher, crude oil prices were steady-lower and the U.S. dollar was lower. Sugar has been trading in a sideways range at higher levels for three weeks. Bulls need to push prices above this trading range to gain fresh power. That means pushing and closing prices above the May high of 16.03 cents. Sugar bulls do still have the near-term technical advantage. Prices are still in a seven-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to push and close prices above technical resistance at 16.03 cents. Bears' next downside price objective is to push and close prices below solid technical support at 14.90 cents. First resistance is seen at 15.75 cents and then at yesterday's high of 15.88 cents. First support is seen at yesterday's low of 15.40 cents and then at last week's low of 15.26 cents. Livestock Jim Wyckoff, Senior Analyst, TraderPlanet.com August live cattle closed down $0.20 at $81.62 yesterday. Prices closed nearer the session low yesterday and closed at a fresh two-month low close. The key "outside markets" were bullish for the cattle futures market yesterday, as the Soy Complex, Grain Futures Jim Wyckoff, Senior Analyst, TraderPlanet.com
July soybeans on Friday closed firmer and near mid-range. The key "outside markets" were bullish for soybeans Friday, as the U.S. stock indexes were firmer, crude oil prices were higher and the U.S. dollar was sharply lower. Bulls do still have the near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. The next upside price objective for the bean bulls is to push and close prices above solid technical resistance at $12.50 a bushel. The next downside price objective for the bears is pushing and closing prices below solid support at $11.00 a bushel. First resistance for July soybeans is seen at Friday's high of $11.93 and then at last week's high of $12.00 3/4. First support is seen at Friday's low of $11.75 1/4 and then at $11.64. [...]Metals Jim Wyckoff, Senior Analyst, TraderPlanet.com August gold futures closed up $7.60 at $962.80 yesterday. Prices closed nearer the session high yesterday, hit a fresh nine-week high and scored a bullish "outside day" up on the daily bar chart yesterday. Gold bulls have the near-term technical advantage and gained fresh upside momentum yesterday. Prices are in a six-week-old uptrend on the daily bar chart. Bears' next downside price objective is closing prices below solid technical support at $920.00. Gold bulls' next upside price objective is to push and close prices above solid technical resistance at the March high of $970.00. First resistance is seen at yesterday's high of $966.70 and then at $970.00. Support is seen at $955.00 and then at $950.00.
Softs Jim Wyckoff, Senior Analyst, TraderPlanet.com July sugar closed down 20 points at 15.74 cents yesterday. Prices closed near mid-range and were pressured by profit taking. Also, the key "outside markets" were mostly bearish for the sugar market yesterday, as the U.S. stock indexes were weaker and the U.S. dollar was stronger. Sugar bulls still have the near-term technical advantage. There are still no early technical clues that a market top is close at hand. Prices are still in a seven-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to push and close prices above technical resistance at 17.00 cents. Bears' next downside price objective is to push and close prices below solid technical support at 14.90 cents. First resistance is seen at yesterday's high of 15.93 cents and then at the contract high of 16.05 cents. First support is seen at yesterday's low of 15.51 cents and then at 15.25 cents. Wyckoff's Market Rating: 7.5
Livestock Jim Wyckoff, Senior Analyst, TraderPlanet.com August live cattle closed up $0.05 at $83.82 yesterday. Prices closed near the session high again yesterday on more tepid short covering in a bear market. Prices last Friday did produce a bullish weekly high close. The key "outside markets" were mostly bullish for the cattle market yesterday, as the Jim Wyckoff, Senior Analyst, TraderPlanet.com July soybeans on Friday closed weaker and near the session low on profit-taking pressure. Bulls still have the solid near-term technical advantage. Prices are still in an 11-week-old uptrend on the daily bar chart. The next upside price objective for the bean bulls is to push and close prices above psychological resistance at $12.00 a bushel. The next downside price objective for the bears is pushing and closing prices below solid support at the April high of $10.64 1/2 a bushel. First resistance for July soybeans is seen at $11.77 1/2 and then at last week's high of $11.89 1/2. First support is seen at Friday's low of $11.64 and then at $11.50. Energies Jim Wyckoff, Senior Analyst, TraderPlanet.com July crude oil closed down $1.03 at $61.00 a barrel yesterday. Prices closed near mid-range yesterday and were pressured on profit taking and a lower
Metals Jim Wyckoff, Senior Analyst, TraderPlanet.com June gold futures closed up $12.80 at $939.50 yesterday. Prices closed near the session high and hit a fresh two-month high yesterday. Prices were again supported by a weaker U.S. dollar yesterday. Gold bulls have the near-term technical advantage and gained fresh upside momentum yesterday. Prices are in a four-week-old uptrend on the daily bar chart. Bears' next downside price objective is closing prices below solid technical support at this week's low of $915.20. Gold bulls' next upside price objective is to push and close prices above solid technical resistance at the March high of $970.00. First resistance is seen at yesterday's high of $941.00 and then at $945.00. Support is seen at $935.00 and then at $930.00.
Softs Jim Wyckoff, Senior Analyst, TraderPlanet.com July sugar closed up 2 points at 15.63 cents yesterday. Prices closed near mid-range yesterday. Sugar bulls have the near-term technical advantage. There are still no early technical clues that a market top is close at hand. Prices are still in a five-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to push and close prices above technical resistance at 17.00 cents. Bears' next downside price objective is to push and close prices below solid technical support at last week's low of 14.90 cents. First resistance is seen at yesterday's high of 15.91 cents and then at the May high of 16.03 cents. First support is seen at 15.50 cents and then at yesterday's low of 15.37 cents.
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* VantagePoint's accuracy statistics were computed on out-of-sample price data utilizing neural networks trained on both single market and intermarket data and relate to the Neural Index which indicates whether the average of tomorrows typical price and the typical price of the day after tomorrow (both unknowns at this time) are expected to be higher or lower than the average of yesterday's typical price and the typical price of the day before yesterday. The numerical value of the Neural Index, either a one (1) or a zero (0) thereby indicates whether or not the trend direction is expected to be higher or lower for each target market over the next two days. A Neural Network accuracy statistic of 80% does not mean that eight out of ten trades will be winning trades. VantagePoint is not a trading system that gives the same specific buy and sell signals to all users. It is a technical forecasting tool that is comprised of proprietary forecasting indicators that apply neural networks to market data for the purpose of finding patterns and relationships between markets and then using this information to make futuristic forecasts. Using these indicators each trader determines his or her own entries, exits and stop placements which may vary from those of other traders due to differences among traders in trading style, objectives, risk propensity, account size and number of contracts involved, thereby producing different trading results from one trader to another. Futures and options trading involves risk, is not for every trader, and only risk capital should be used. For more detailed information, please read our Important Disclaimer, Privacy Policy, and Software License Agreement. |
