A look a the First Half Cattle Market Outlook 9/17/2020

USDA expects domestic beef supplies to increase on a per capita basis during the first half of 2021 compared to the artificially constrained January/July supply. USDA has Deliverable steers trading at an average $107 in the first half of 2021 which falls directly on the regression line displayed in the scatter study. The futures market has a large carrying charge built in with 2021 futures trading roughly $10 premium to the USDA projections. The premium restricts the up side potential of cattle futures unless the domestic beef supply is tighter than USDA currently projects.