CME: Futures Recover Monday's Losses, Tuesday24 April 2013
US - Live cattle futures closed steady to 40 cents higher, though that was in the lower end of Tuesday's trading range.
Mild short-covering was seen in the live cattle market yesterday following Monday's losses. But buying interest was limited as traders maintain a cautious tone as they wait to form cash cattle opinions for the week, write ProFarmer analysts.
June cattle closed unchanged on the session and 105 points down from the early highs, say experts at CME. A bullish weather forecast and solid gains in the stock market were not enough to offset weak demand concerns and hefty cold storage supply and the market gave back all of the early gains.
The market managed to trade sharply higher early as a more favorable weather forecast for grilling demand and higher beef prices were seen as more important forces than the bearish cold storage report released late yesterday. The market seems to have quickly priced-in the bearish tone for the Cattle-on-Feed report from Friday.
The 6-10 and 8-14 day weather forecast calls for normal to above normal temperatures for the central part of the country and this may help provide underlying support. The Cold Storage report, released after the close yesterday showed record high beef stocks for this time of the year.
End of March frozen beef stocks came in at 513.2 million pounds which was up 4.7 per cent from February and up 2 per cent from last year. Stocks typically drop about 3 per cent for the month so the 4.7 per cent increase is seen as a negative development.
Traders remain optimistic that a turn up in the spring weather will spark improving demand from the consumer for grilling beef.
Boxed-beef cut-out values at mid-session were up $.80 to $191.58 as compared with $190.45 last week at this time.
Slaughter came in slightly above trade expectations at 123,000 head which could be a sign of firm packer demand.
TheCattleSite News Desk