CME: February Futures 30 cents Higher, Thursday08 February 2013
US - Live cattle futures opened under pressure, but futures improved as the day progressed to end split with February and April futures 30 and 7 1/2 cents higher, respectively, while deferred months posted losses of 27 1/2 to 52 1/2 cents, write market analysts at Profarmer.
Cash cattle trade has yet to get underway and choppy boxed beef action this morning and yesterday has raised some questions about whether feedlots will get firmer prices.
The higher close after early weakness leaves a more positive tilt to the cattle outlook going into the end of the week, according to CME.
Talk that the snowstorm on the East Coast could add yet another negative demand factor to the market helped to spark some of the weakness in the morning.
April cattle traded more than 70 lower on the day ahead of the pit opening but managed to recover to trade slightly higher on the day into the close.
At the lows, the market was down nearly 300 points from the January 28th peak and talk of the oversold condition helped to support. Weak packer margins plus sluggish trade in the beef market this week has helped to pressure the market with traders second-guessing the steep premium of futures to the cash.
Cash markets are bid at $123.00 in the plains with offers at $127-$128 as compared with trade last week at $123-$124.
Weakness in the stock market helped to pressure as well. A sharp drop in corn values helped support the feeder cattle futures to a significant recovery of more than 100 points off of the early lows. Weekly U.S. beef export sales for the week ending January 31st came in at only 9,700 metric tonnes.
Cumulative sales for 2013 have reached 156,200 metric tonnes, up 1.9 per cent from last year. Boxed-beef cut-out values were down $0.34 at mid-session to $183.60 which is down from $185.32 last week.
Select prices were up 57 cents to $181.22 as compared with $180.25 last week at this time. Slaughter came in lower than expected at 121,000 head which is sometimes a sign of weak demand from the packer.
TheCattleSite News Desk