Live Cattle (LE)

The cornerstone of America's beef industry. Live Cattle futures track the value of cattle ready for slaughter.

2-Minute Beginner Summary

Live Cattle futures represent fed cattle ready for slaughter and processing into beef. Prices depend on supply (herd size, imports), demand (retail beef sales, exports), and feed costs (corn). The U.S. is the world's largest beef producer and a major exporter.

What Is Live Cattle?

Live Cattle futures represent fed cattle weighing 1,100-1,400 pounds, ready for slaughter. They're traded on CME.

Why LE Matters

Beef is a major protein source. Cattle prices affect meat prices at grocery stores and restaurants.

What Moves the Price?

Top 6 drivers affecting Live Cattle prices:

Herd Size

U.S. cattle herd cycles over 10-12 years. Liquidation phases tighten supply.

Feed Costs

Corn is the primary feed. High corn prices can reduce cattle profitability.

Export Demand

Japan, Korea, China are major buyers. Trade deals affect access.

Packer Margins

Meatpacker profitability affects cattle buying enthusiasm.

Consumer Demand

Retail beef demand, grilling season, and economic conditions matter.

Weather

Drought affects pasture conditions, forcing herd liquidation.

Market Structure

Spot vs Futures

CME Live Cattle futures are the benchmark. Cash prices are negotiated between feedlots and packers.

Contango & Backwardation

Often shows seasonal patterns. Strong demand can create backwardation.

Key Exchanges: CME Group

Contract Size: 40,000 pounds (approx 30 head)

Seasonality

Tied to consumer demand patterns.

Peak Months: March, April, May

Low Months: October, November, December

Prices often rally into grilling season (spring/summer). Post-summer, cattle on feed increase supply.

Macro Sensitivity

Cattle prices track consumer demand and economic confidence. A weak dollar supports exports.

USD Sensitivity: negative
Inflation Sensitivity: positive
Growth Sensitivity: positive
Rates Sensitivity: neutral

Stock & ETF Exposure Map

Related Stocks

Related ETFs

Key Calendar & Reports

USDA Cattle on Feed (Monthly (3rd Friday))

Source: USDA. Feedlot inventory and placements

USDA Cold Storage (Monthly)

Source: USDA. Beef in freezer storage

Weekly Slaughter (Weekly)

Source: USDA. Number of cattle slaughtered

USDA Cattle Inventory (Semi-annual (Jan, Jul))

Source: USDA. Total U.S. cattle herd size

How to Trade Live Cattle

ETFs like COW offer exposure. Meatpacker stocks (TSN, SAFM) provide indirect access. CME futures are the benchmark.

Frequently Asked Questions

What is the cattle cycle?

Cattle herds expand and contract over 10-12 years based on profitability and drought. We're in a contraction phase.

What is the difference between live and feeder cattle?

Feeder cattle (600-800 lbs) go to feedlots. Live cattle (1,100+ lbs) are ready for slaughter.

How do droughts affect cattle?

Drought destroys pasture, forcing ranchers to sell cattle early. Short-term bearish, long-term bullish (smaller herd).

Why do cattle prices often rise in spring?

Grilling season demand increases. Also, fewer cattle are ready for slaughter after winter.

What is the packer spread?

The difference between wholesale beef prices and live cattle prices. Wide spreads mean profitable packers.

How do exports affect prices?

U.S. beef is premium worldwide. Strong exports (especially to Asia) support prices.

What is USDA grading?

Beef is graded Prime, Choice, Select based on marbling. Higher grades command premiums.

Is plant-based meat a threat?

Growth has slowed. Beef remains dominant but some market share shift is occurring.

Glossary

Fed Cattle: Cattle finished in feedlots on grain, ready for slaughter.
Feeder Cattle: Younger cattle (600-800 lbs) placed in feedlots for finishing.
Cattle on Feed: Number of cattle in feedlots being prepared for slaughter.
Placements: Cattle newly placed in feedlots.
Marketings: Cattle shipped from feedlots to slaughter.
Choice/Select Spread: Price difference between USDA Choice and Select beef.
Cutout: Wholesale value of beef carcass cuts.
Boxed Beef: Wholesale beef after processing, shipped in boxes.
Cow-Calf: Ranch operation raising calves from birth to weaning.
Feedlot: Operation that feeds cattle to slaughter weight.