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CME: Thursday Futures Fade With Cash Cattle $128

05 April 2013

US - Live cattle futures got off to a slightly firmer start, but this quickly gave way to profit-taking and bears had momentum on their side into the close.

Futures ended 50 to 85 cents lower, which was near session lows. Cash cattle trade is thought to be largely complete after Wednesday's trade at mostly $128 on the Southern Plains.

June Cattle closed sharply lower into the end of the pit trade at down 85 on the day to the worst close since March 26th.

The market was trading higher ahead of the pit opening but selling emerged to drive the market sharply lower and to the lowest level since March 27th early in the day.

Cash markets were strong this week but traders remain concerned that colder than normal weather will hold consumer demand weak.

Ideas that packers might reduce slaughter in order to boost packer margins was seen as a possible bearish force. In other words, traders believe that beef prices are not moving up fast enough to keep up with the cash rally and that packer margins will slip deeper into the red.

Weekly U.S. beef export sales for the week ending March 21st came in at 17,300 metric tonnes, compared with the prior 4-week average of 16,525.

Cumulative sales for 2013 have reached 269,100 metric tonnes, down -0.4 per cent from last year's pace.

Boxed-beef cut-out values at mid-session today came in at $191.58, up $.10 from Wednesday and up from $189.07 last week at this time.

Slaughter came in above trade expectations at 118,000 head.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

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