Futures, futures, and more futures 📉

Reuters reported that the Chicago Mercantile Exchange (CME) live cattle futures rose on Tuesday to their highest level since April. Feeder cattle futures were also high, while lean hog futures fell to their lowest level in more than a week.

• Tightening livestock supplies are a concern: the projection is that cattle will become more expensive next year and beef production will decline.
• Feeder cattle futures rose with the boost the market got from declining prices for grains used for animal feed.

The reason is that producers are sending more animals to slaughter, instead of keeping them to reproduce – feed costs are elevated and supplies of pasture are limited due to droughts.

• Exceptional drought-related cattle movement in the Southern Plains was noted for the month.

Additionally, China's demand for U.S. beef could increase if Beijing blocks meat shipments from Australia and New Zealand – which hasn’t been officially announced, despite Chinese media reports of a ban of ANZ meat.