After previously hitting record prices, cattle prices reversed course amid seasonal trends that typically see a dip in consumption later in the summer.
However, the pullback may be short-term as the market still faces significant fundamental hurdles. Specifically, the current herd size is the smallest since 1951. Additionally, while dry conditions have moderated, some ranchers are retaining breeding animals to expand herds rather than selling them for slaughter, which will further diminish supply. [Beef ETN Loses Its Sizzle]
COW “has been in decline since July, losing more than 10% from that peak, but it found buyers at a price level that acted as support and resistance over the past few years. More importantly, this is also the same price level at which the trend rapidly accelerated to the upside in February. Whatever prodded bulls into action six months ago seemed to remain fresh in investors’ minds,” according to Kahn in the Barron’s piece.
Teucrium Corn Fund
ETF Trends editorial team contributed to this piece.