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CME: Futures End Week Lower, Friday

20 May 2013

US - Live cattle futures ended the week under pressure and posted sharp losses for the week.

August live cattle ended the week $2.22 1/2 lower than last week's close and posted a contract low to do more technical chart damage, write analysts at ProFarmer.

Feeder cattle also posted sharp weekly losses. Nearby live cattle ended the week at a $5 to $6 discount to this week's cash market and futures have moved into oversold territory.

Meanwhile, Choice boxed beef values soared this week but movement slowed, raising questions about demand.

June cattle could not shake of long liquidation selling and pushed modernly lower on the session ahead of the USDA Cattle-on-Feed report for release after the close, write CME experts.

August traded sharply lower on the day and down into new contract lows.

Traders see placements for April up about 12-13 per cent from last year and marketings up 2-3 per cent which would leave May 1st on-feed supply down 3.5-4.0 per cent from last year. New record high beef prices posted late Thursday and the discount of futures to the cash market (525 points on Friday) has failed to provide much support to the market.

Traders see beef prices peaking soon as retailers finish booking needs for Memorial Day holiday weekend.

Cash traded $125.00 this week in Texas. A collapse in the gold market this week combined with the surge in the US dollar (highest since July 2010) has added to the bearish tone for commodities in general and the surge in the dollar suggests a much more difficult time for US exporters.

Choice boxed-beef cut-out was up $.19 at mid-session to $208.96 from $204.98 last week which marks a new all-time high.

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