Seasonal data suggests cattle price have peaked

ABSR Research: Chart of the Day

Live cattle futures prices have climbed over 10% in the past 7 months but probability suggests the run may be over. Both our trend and momentum gauges point to continued higher prices but the market has followed its seasonal pattern nearly to a tee this year, which suggests the run has likely peaked. Our peak/trough probability graph above shows that in the past 20 years cattle futures have hit a top quartile (price in the highest 25%) price for the marketing year between October and December 46.1% of the time. As it stands, the peak price looks as if it will have occurred in early October this year. By contrast we will be entering the highest probability period for a bottom quartile price between March and June. In other word, given the current technical picture we may make one more run at the high, but be ready to sell on new overbought signals.

Shawn Bingham, CAIA

Source(s): ABSR Research, Commodity Systems Inc.

The ABSR Research: Chart of the Day is a caption from our daily Agriculture Edge Market Monitor newsletter. The full report includes statistical based commentary, graphs and data for the agriculture sector including: Corn, Soybeans, Wheat, Live Cattle, Lean Hogs, and Cotton. To learn more about our agriculture marketing platform click here. To register for a FREE, no obligation 30 day trail click here.

 

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©2018 ABSR Research LLC. All rights reserved. The risk of loss in trading commodity interests can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The materials and data on this site are provided on an “as is” basis and without warranties of any kind. While every effort has been made to insure the accuracy of the information, no guarantees can be made that the information is full, complete, or accurate. Performance information with regard to the ABSR Indices contain a significant period of Pre-Inception Performance (PIP) history. Users should be aware of the limitations of this type of data.
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