CME: Storm Stress Leads to Nearby Futures Recovery,Friday04 March 2013
US - April and June live cattle futures closed 10 and 15 cents higher, respectively, while other contracts were 2 1/2 to 45 cents lower on Friday, according to market analysts at Profarmer.
Nearby futures led a corrective price recovery for the week. Feedlots are still trying to dig out from this week's winter storm through the Plains.
It will take time for cattle to regain weight lost during the storm, which should keep cattle futures and the cash cattle market on an upward path next week, write experts at the Chicago Mercantile Exchange.
April cattle closed just 10 points higher on the session which left the market up 172 points for the week. The market saw an early bounce to trade at the highest level since February 8th into the pit opening and then slipped back to trade just slightly higher on the day into the mid-session.
The early surge from spec buying was likely prompted by the surge in cash markets this week to $128.00. A jump in beef prices last week to the highest level since January 30th is seen as a positive sign for the possibility that the cash market continues to trend higher through March.
Warmer weather normally helps improve consumer demand and traders see a continued drop in supply ahead.
Weak outside market forces like a jump in US dollar to a 7 month high and poor economic news from China and Europe overnight may be factors which helped to spark weakness in a wide range of commodity markets and may have contributed to the mid-session set-back.
Cattle slaughter came in well below trade expectations at just 108,000 head which might suggest that feedlots are (or where) having more difficulty with the weather situation this week than traders expected.
For the week, slaughter is estimated at 563,000 head, down 10,000 from last week and down 57,000 from last year.
Boxed beef cutout values were up $1.33 at mid-session to $187.49 which is up from $182.89 on the previous week.
TheCattleSite News Desk