Commodity Trader's Almanac 2O11

176

LIVE CATTLE ONE-YEAR SEASONAL PATTERN

LIVE CATTLE CYCLE, SEASONAL PATTERN, AND TRADING GUIDE

Beef inventories here in the United States have declined in the last decade, as

production costs have increased as a result of higher feed and transportation

costs. Breeding is costly and requires a lengthy start-up time. For example,

females can first be bred between 14 to 18 months of age, but gestation is

approximately 9 months. Once the herd population is reduced, it may take up to

3 years to begin building up calf inventories.

Cattle prices are prone not only to seasonal tendencies but also to cyclical

forces, as the country’s herd population expands and contracts in response to

production costs and farm operation profit margins. Typically, the seasonal

low is in June, with a minor peak in November. Beef prices typically form a sea-

sonal high in March, as packers have purchased inventory ahead of the summer

grilling season.

–8

–6

–4

–2

0

2

4

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

25-Year Pattern

5-Year Pattern

Based on near-term futures contract daily data 1985–2009

LIVE CATTLE NEAR-TERM CONTRACT ANNUAL HIGHS, LOWS, AND CLOSES SINCE 1972

HIGH LOW YEAR HIGH LOW YEAR

YEAR DATE CLOSE DATE CLOSE CLOSE YEAR DATE CLOSE DATE CLOSE CLOSE

1972 12/29 40.825 08/22 32.800 40.825 1992 03/09 79.525 05/28 69.225 77.125

1973 08/13 60.775 09/25 38.550 48.650 1993 03/22 83.725 12/02 72.225 73.450

1974 01/28 53.825 06/11 33.825 39.575 1994 03/04 77.200 06/27 62.275 72.675

1975 06/18 52.075 03/03 34.300 42.925 1995 01/20 75.000 05/10 59.100 66.425

1976 04/20 49.550 01/26 36.275 40.400 1996 09/13 73.275 04/25 54.800 64.975

1977 05/02 46.250 01/14 36.375 42.375 1997 07/28 71.275 07/08 62.925 66.450

1978 05/26 61.975 01/10 41.175 58.925 1998 04/30 69.500 12/15 57.625 60.525

1979 04/26 78.825 08/07 56.525 70.675 1999 11/16 70.775 01/04 59.625 69.600

1980 07/25 73.950 04/02 60.600 68.075 2000 12/18 78.225 09/06 66.300 77.925

1981 04/27 72.150 12/31 54.650 54.650 2001 03/06 81.650 11/12 61.750 70.700

1982 05/17 73.125 12/06 55.150 58.325 2002 12/31 79.625 05/21 59.400 79.625

1983 04/13 70.750 09/02 55.550 67.850 2003 11/26 98.475 06/16 67.050 73.525

1984 03/23 72.125 09/26 60.725 66.675 2004 12/27 91.775 02/04 71.375 87.825

1985 02/04 68.800 07/26 51.675 61.150 2005 12/20 97.275 07/11 78.075 96.375

1986 01/27 63.300 06/03 50.125 55.525 2006 01/10 96.550 04/04 73.125 92.500

1987 05/11 70.125 01/02 55.975 63.125 2007 03/12 102.025 06/26 88.625 96.175

1988 10/12 75.250 06/23 62.225 73.950 2008 08/06 108.550 12/05 81.450 86.050

1989 03/21 78.675 05/30 66.650 77.375 2009 07/28 90.575 03/30 80.075 86.175

1990 11/26 79.750 04/26 72.600 77.200 2010* 03/19 97.975 01/11 85.050

AT PRESS TIME

1991 03/08 81.900 08/08 68.650 72.400

*Through April 30, 2010

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