Meat & Livestock News

Cattle Contract Trends: A Comprehensive Overview Nov 10, 2023

USA Cattle Contract Trends 10 Nov 2023

The latest data released on November 10, 2023, by the Agricultural Marketing Service’s Cattle Contract Library offers an insightful glance into the cattle trading contracts, underscoring the importance of market transparency and resourceful insights for producers. The library serves as a critical tool for understanding the dynamics of market supply and demand, aiming to improve price discovery.

As per the October 2023 report, there has been a slight decrease in the number of active cattle contracts, with a net reduction of 15, bringing the active total to 171. This contraction falls within the expected market activity range and does not indicate a significant deviation from the norm.

The breakdown of base price sources for these contracts reveals a predominant reliance on USDA reports, which inform 75.58% of the active contracts. This is followed by prices determined via negotiations and those set by the Chicago Mercantile Exchange (CME), accounting for 10.60% and 8.76%, respectively. Such data are crucial in understanding the pricing mechanisms that drive the cattle market.

In terms of actual volume for October 2023, the numbers reached 991,787 head of cattle. The volume sourced from USDA reports was notably high, representing 78.27% of the actual volume, which indicates a stable preference for USDA report prices in contractual agreements.

Comparing the actual and estimated volumes over the rolling 12 months reveals minor discrepancies, with the actual volume in October slightly below the estimates. However, the overall trend indicates market stability, with the estimated volume for November 2023 closely mirroring the actual figures of the previous month, suggesting a balanced market outlook.

This routine report, refreshed weekly, demonstrates a commitment to market clarity and equitable practices within the cattle industry. It serves as a barometer for producers and stakeholders to make informed decisions and strategise effectively.