CME: Kansas Cash Cattle Lower on Week at $127, Wednesday11 April 2013
US - Cattle futures extended losses into the close to finish sharply lower and on or near session lows.
Live cattle futures struggled to find buying interest through Wednesday morning amid cautious price action ahead of cash cattle trade. Selling pressure built this afternoon after cash cattle trade got started at $127 in Texas, write market analysts at ProFarmer.
That price was below expectations; traders had hoped for steady to firmer cash cattle prices this week.
June and August cattle closed sharply lower on the session as cash cattle traded $1.00 lower on the week in Kansas at $127.00 and weakness in feeder cattle and speculative long liquidation selling was active, say experts at CME.
Texas cattle also traded at $127.00, down $1.00 on the week. Both contracts posted new contract lows. The market saw choppy to lower trade early in the session as traders see the colder and wetter trend for the next two weeks for the central and northern part of the country as a bearish force.
There were no deliveries for the second day of the delivery period but the weather appears to have traders in a long liquidation mode.
Rains and snow in parts of the plains could muddy feedlot conditions and slow weight gains but traders seem to be more nervous over the demand weather. Traders see temperatures on the East Cost turning to "above normal" for the next few weeks but this seems to have been offset by a cold and wet pattern for the Midwest.
The USDA supply/demand update showed a revision lower of 230 million pounds in beef production for 2013. This was partially offset by a 10 million pound adjustment higher in imports and 15 million lower in exports. Second quarter beef production is expected to be down 2.6 per cent from last year.
Boxed-beef cut-out values at mid-session were up 18 cents to $191.59 as compared with $191.48 last week at this time. Slaughter came in right on trade expectations at 121,000 head.