Cattle and lean hogs futures have slid in the past 30 days as livestock producers look to protect themselves from downside risk. Besides oats, which are down 10% in the past month, the protein complex has been the worst performer of all the agricultural commodities in the last month.
In the past 30 days:
April Live Cattle down 5%
April Lean hogs down 4%
Mar Feeder Cattle 8%
What’s behind the slide and what will it mean for cash prices?
Anne Wasko, co-host of the Beef Market Update on RealAgriculture.com believes “on the cattle side, the market is preparing for the large beef supplies to come starting in Q2. Although it won’t all occur on April 1 the market is attempting to signal the spring highs are in.” Wasko continued “However, fundamentally the cash market is still strong this week making this a tricky time to be in the markets (cash higher, futures lower).”
In the case of April live cattle futures, they are still up 15.6% in the last 52 weeks and virtually flat in the last three months.
As you can see in the above chart, April live cattle futures is hovering above the 200-day moving average. Of course the 200-moving-average provides supports but leads to very bearish signals if that black line is broken.
Additionally the Canadian Dollar has dropped to 76.5 cent in the June contract which will counter some of the protein futures drop as for Canadian exporters.