CME: Futures Post Moderate Losses, Wednesday14 February 2013
US - Live cattle futures settled at or near session highs and narrowly mixed for the day after posting moderate losses for most of the session, write market analysts at Chicago Mercantile Exchange.
Futures faced pressure much of the day after light cash cattle trade took place at $123 yesterday -- down $2 from most of last week's trade, concluded experts at Profarmer.
But some light short-covering returned as feedlots stood their ground and refused to sell additional cattle at those lower prices today.
April cattle closed 55 lower on the session but managed to recover 60 points off of the mid-session lows. The market was lower into the pit opening as continued demand concerns and the stiff premium of futures to cash seems to be attracting more long liquidation selling.
It was an inside trading session as the break held well above yesterday's lows. Beef prices are up from last week's lows but still sluggish and the sales in the cash market at $123.00 yesterday helped to pressure.
Some believe that much of the volume in the cash market on the week will be $124.00 to $125.00 but this still leaves April at a stiff premium.
A stormy weather outlook for the central plains into next week has helped to provide some underlying support. The weather seems to be turning more active just as supply begins to tighten with 3-8 inches of snow across Texas and Oklahoma yesterday.
Boxed-beef cut-out values at mid-session came in at $183.57, up 12 cents on the session and down just slightly from $183.94 last week.
High gasoline prices and a sluggish economy continue to raise concerns that the beef market will remain sluggish.
Beef prices late yesterday rallied to the highest level since February 7th but weak packer margins remain a negative force and traders see the need for a continued jump in beef prices to rationalize the strong premium.
Slaughter came in well below trade expectations at just 114,000 head which can sometimes suggest weak demand for live inventory from the packer.
TheCattleSite News Desk