CME: Futures Close Mostly Lower, Tuesday20 February 2013
US - Live cattle futures closed mixed to mostly lower and anywhere from low- to high-range for the day, write market analysts at Chicago Mercantile Exchange.
Live cattle futures were pressured on Tuesday by the premium they hold to the cash market, especially given traders expect no better than steady cash cattle prices compared with last week's mostly $123 trade in the Plains, write Profarmer analysts.
April cattle saw a decent mid-session rally to 130.27 before following the hog market lower into the close to close 90 lower at 129.55.
The market traded just slightly lower near the pit opening but was quickly trading moderately lower on the day and the market gave back all of Friday's rally and a bit more.
Another break in beef prices late Friday to the lowest level since August plus already weak packer margins had traders nervous that packer demand to pay up in the cash market this week will be extremely limited and this helped to spark some long liquidation selling.
The forecast for hefty snow totals for Western Kansas, Nebraska and other parts of the plains this week helped to provide some underlying support.
News of 12 new deliveries added to the negative tone. While packers are trying to reduce slaughter to support beef, the move to another new low for beef on Monday was seen as a disappointment to the bulls.
Cash traded at just $123.00 last week. Beef prices on Monday when the market was closed were at $181.95, down $1.58 from Friday and down from $182.12 the previous week.
Boxed-beef cut-out values at mid-session on Tuesday reached $183.13, up $1.18 from yesterday and up from $182.72 last week at this time.
Slaughter came in below trade expectations at 121,000 head.
Slaughter for the week is at 230,000 from 239,000 last week and 228,000 last year.
TheCattleSite News Desk