Farewell Beyond Meat, Welcome Real Beef

CME: Live Cattle Futures ( LE1!)
Last week, Beyond Meat ( BYND) pushed back against rumors that it has filed for bankruptcy, calling recent media reports “unequivocally false.” The denial comes after several headlines suggested the company was headed for Chapter 11 bankruptcy.

It was only six years ago when Beyond Meat was the hottest game in town. It ran on a high-flying hope to revolutionize what we eat and make us healthier. Shares of BYND went public at $25 on May 2, 2019, and were up 163% on the first day.

A confession: I was under its magical spell too and went on national TV in 2019 to discuss the potential of plant-based meat in China. My optimism wasn’t ungrounded. Beyond Meat entered the Chinese market in 2020 with partnerships with Starbucks and Alibaba. The Company opened its first factory near Shanghai in 2021.


BYND reached its all-time high (ATH) of $234.90 on July 26, 2019. As of Monday, the shares are trading at $2.60, down 33% year-to-date, and down 98.9% from the ATH.

Many reasons caused the downfall of the former market darling. High cost and unnatural flavor are among the most lethal. When a slice of plant-based meat costs twice as much as ground beef, consumers would think twice before they pick it up.

Back at the television program in 2019, I was asked to participate in a blind test. It wasn’t hard for me to tell the difference between the juicy McDonald’s breakfast sausage and the dryness in the plant-based meat.

Beyond Meat closed its Chinese factory in February and completely exited the Chinese market by the end of Q2, according to the Company’s announcement.

In the past few years, consumers have gradually woken up to the fact that, when it comes to meat, real beef tastes the best. On Monday, CME live cattle futures are trading at $231 per hundred pounds, up 19% YTD and up 112% in five years.

August WASDE Report
On August 12th, the US Department of Agriculture (USDA) published its latest updates on World Agriculture Supply and Demand Estimates, also known as the WASDE report.

August WASDE is bullish on beef and cattle:
• The forecast for 2025 beef production is lowered on reduced fed and non-fed cattle slaughter and lighter dressed weights.
• For 2026, beef production is lowered due to reduced expected placements in the second half of 2025, as well as reduced cow slaughter in 2026.
• Beef imports for 2025 are lowered to reflect reported trade data through the first half of the year, as well as reduced shipments due to higher tariff rates, particularly from Brazil. The reduction is carried into beef imports for 2026. The beef export forecast is reduced for 2025, reflecting tighter domestic supplies. The reduction is carried into lower exports for the first half of 2026.
• Cattle price forecasts for 2025 are raised for both the third and fourth quarters based on recent price strength and resilient demand for beef. The higher cattle price forecasts are carried into 2026.

Trading with CME Live Cattle Futures
Futures market shows bullish sentiment. CFTC’s Commitments of Traders report shows that, as of August 12th, CME live cattle futures (LE) have total open interest (OI) of 382,088 contracts.
• “Managed Money” holds 151,580 Long contracts, 31,587 Short contracts, and 43,598 contracts at spread positions.
• The long/short ratio of 4.8-to-1 shows that “Smart Money” is bullish on Live Cattle.


A trader sharing a similar bullish view could explore CME Live Cattle futures.
Live Cattle futures have a notional value of 40,000 pounds (~18 metric tons). At Monday quote of $232 (per 100 pounds), the lead October contract LEV5 is worth $92,800. To buy or sell one contract, a trader is required to post an initial margin of $3,100.

The futures contract has built-in leverage of 30:1 (= 92800 / 3100).
• If LEV5 goes up 5% to $243.6, a long position will gain $4,640 (= (243.6-232) * 400). This will be a hypothetical return of 150% (= 4640 / 3100).
• If LEV5 declines, the trader will see large losses due to leverage. To avoid unlimited exposure, the trader could enter the long position with a stoploss.
• For illustration, a stoploss at 225 for the 232 long order will cap the loss at $2,800 (=(232-225) * 400)

Happy Trading.

Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.

CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/