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 |