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CME: April Closes Higher After Choppy Tuesday

10 April 2013

US - Live cattle futures closed mixed and near the middle of today's trading range in most contracts.

Price action was choppy yesterday as traders wait on clearer indications of this week's cash cattle trade.

While smaller showlist numbers suggest packers may raise cash cattle bids from week-ago in the Plains, ongoing concerns with beef demand are keeping nearby live cattle futures at a slight discount to last week's cash trade.

June cattle closed lower with an inside trading sessions. Even with a solid recovery in the stock market, demand concerns for beef and a jump in corn values which pressured feeder cattle was enough to spark some late speculative selling to pull the market lower on the day.

April managed to close higher. The market saw choppy to higher trade early in the session and was trading slightly higher on the day into the mid-session. April cattle saw solid gains into the mid-session as a lack of deliveries and ideas that cash cattle can hold steady this week helped to support.

Traders see temperatures on the East Cost turning to "above normal" for the next few weeks and this has prompted hopes that beef prices will receive a boost as retailers may anticipate improving consumer demand for grilling cuts.

Packers appeared to be cutting back on kills in the past several sessions due to poor margins but a turn up in beef might help support better margins.

Boxed-beef cut-out values at mid-session were up 14 cents to $191.09 as compared with $191.42 last week at this time.

Slaughter came in above trade expectations and this may indicate that demand for live inventory from packers is a bit higher than expected. While packers may have cut-back on slaughter on Friday and Monday, they seem to be already picking up the pace. However, it will still take a jump in beef prices to help rationalize steady cash cattle.

Feedlot conditions might be sloppy in pasts of northwest Kansas and especially Nebraska with snow, some rains and colder weather for the next day or two. This might slow cattle feedlot performance short-term.

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