The Bullish Picture for August Live Cattle – 02/21/2023
August live cattle appear to have significant upside potential based on the latest supply/usage forecasts from USDA. We present the results of a cattle price forecast model which uses US beef production and exports combined with the US Gross Domestic Product (GDP) to project a late winter through summer price range forecast for August live cattle. The resulting price range forecast of $151 up to $181 compares to August live cattle trading at $159 on 02/21/2023.
Larger than expected summer beef supplies is the major hazard to a long cattle futures play.
| Forecast February – August live $/Cwt. | |||
| High | Low | ||
| Forecast | $181 | $155 | |
| standard deviation | $9 | $9 | |
| % Rsq | 90% | 87% | |
| Assumptions for 2023 August Live Price Range Forecast | |||
| 2022 | 2023 | % Change | |
| Beef Production | 7,146 | 6,530 | -9% |
| Beef Exports | 943 | 900 | -5% |
| US GDP | $25,663 | $27,716 | 8% |
| Beef Production & Exports in Million Pounds, GDP in Trillion $ | |||
| Data for third calendar quarter 2023 | |||
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