However, the 6.2% drop in placements in June of cattle on for fattening on feedlots, revealed by US Department of Agriculture data, and the particular drop in buy-ins of heavier animals suggest that "mid-term beef supplies will be tighter than expected".

The drop in placements comes against a backdrop of record prices of feeder cattle, those ready for fattening, as feedlots battle for supplies with breeders desperate for livestock to rebuild herds, and exploit the lower feed prices and improved pasture conditions brought by benign US weather.

Indeed, the extent of herd destruction encouraged by the 2012 drought, which extended in the southern Plains ranching areas until early this year, was reflected in separate USDA data showing a 2% drop in US beef heifers in the two years to June 1.

"This implies that herd rebuilding will likely take longer than expected and the market may not see the full effect until at least 2016," Mr Narayanan said.

Eoin Treacy's view

Feeder Cattle prices had been surging higher but the early July peak is looking increasingly like a penultimate peak, following the loss of uptrend consistency. Prices failed to hold the move to new highs and fell by the limit of $3 today. Considering how overextended prices remain relative to the 200-day MA, mean reversion remains the most likely scenario.  

Live cattle prices have a similar pattern but the moves both up and down tend to be more exaggerated.