USDA Outlook for Steer Market in the first Half of 2021 -11/11/2020

The accompanying scatter studies display the first and second quarter average Midwest steer price as a function of per capita domestic beef supply. The points plotted USDA  are based on data in the November 2020 WAOB report.

The February and April futures contracts are trading between $3.00 and $6.00 premium to USDA’s forecasts. The virus problems disrupted the beef market in the spring of 2020 resultiung in cattle trading low on economic value. The current premium to the USDA forecast does not preclude a continuation of the current cattle futures rally but it does limit upside potential.