CME: Cattle Slaughter Continues on Demand Concerns24 May 2013
US - Live cattle futures opened slightly higher but slumped through the day, closing on the lows of the day with losses of 45 cents to $1.02 1/2. Demand concerns dominated trading today as Choice beef prices posted another record high but cash cattle trade in the Southern Plains traded near $124, down $1 from last week.
June cattle closed sharply lower on the day as traders believe beef prices are close to a seasonal peak and that cash markets will struggle to avoid a downtrend into the summer. The market inched higher in quiet and choppy trade early today as a strong recovery in the US stock market from overnight lows, solid weekly export sales news and another new all-time high in beef posted late yesterday helped to provide support.
The cold storage report was considered neutral to slightly negative. End of April frozen beef stocks came in at 510 million pounds which is down 1.5% from last year and down 0.2% from the previous month.
Seasonally, stocks tend to drop 2% for the month of April so the small dip might be considered slightly negative. August closed sharply lower on the day and experienced a new contract low close. Weekly export sales came in at 20,400 tonnes as compared with 3,075 tonnes as the prior 4-week average.
Cumulative sales reached 339,300 tonnes for the year, down 17% from last year. Boxed-beef cut-out values were up 15 cents to $211.35 at mid-session as compared with $208.77 last week at this time and this is yet another new all-time high. Slaughter came in slightly above trade expectations at 124,000 head.
TheCattleSite News Desk