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CME: Futures Open High and Fade, Tuesday

03 April 2013

US - Live cattle futures got off to a firmer start, but futures softened throughout Tuesday and ended low-range with losses of 95 cents to $1.32 1/2, write experts at ProFarmer.

Feeder cattle futures finished near the top of their daily trading range with losses of 57 1/2 to 95 cents. Nearby contracts led today's price decline. Traders took advantage of dollar strength and the recent rally in the cattle market by booking profits on Tuesday.

June Cattle closed sharply lower on the day but did manage to bounce more than 50 points off of the lows. The market saw choppy to a little higher trade into the pit opening but turned lower to post moderately lower trade on the day into the mid-session, write market experts at CME.

With weak packer margins and the availability of contracted cattle for early April, traders are questioning the ability of the cash market to trade higher over the near-term. The jump in beef prices on Monday yesterday may help improve packer margins; especially if packers are using contracted cattle.

In addition, the discount of futures to the cash market may help limit the downside. Ideas that the market is overbought after the recent jump higher helped to pressure the market into the mid-session.

Weather is shifting from below normal temperatures now to above normal in the next few weeks and this has traders looking for better demand; especially for grilling on the East Coast.

Boxed-beef cut-out values at mid-session today came in at $191.75, up $1.22 from Monday and up from $190.43 last week at this time.

Slaughter came in right on trade expectations at 121,000 head.


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