CME: Futures Post Losses, Thursday31 May 2013
US - Some live cattle contracts got off to a slightly firmer start, but this quickly faded and selling picked up as the day progressed.
Futures ended low-range with losses $1.02 1/2 to $1.35, write ProFarmer analysts.
The live cattle market saw a long-overdue rebound this week, but economic data pointing to another soft spot in the U.S. economic recovery again brought demand concerns into focus. Traders are worried consumers will resist record-high Choice boxed beef prices.
August cattle closed sharply lower on the day after moving up to the highest level since May 15th in the overnight session and the outside-day-down is seen as a negative technical development, say market experts at CME.
A lack of trade in the cash market this week had longs a bit nervous and sparked some long liquidation selling after solid gains of the past three sessions and the selling accelerated after the mid-day to drive the market lower.
Traders see cash cattle about steady with last week ($124.00-$125.50) with bids emerging at $122.00 and offers at $126.00. Positive packer margins, the discount of futures to the cash market and ideas that the US economy is doing better helped to provide some support on the sell-off.
There is some talk that weekend clearance for beef was strong last weekend and that retailers are re-stocking inventory.
Boxed-beef cut-out values at mid-session came in at $209.18, down $.35 on the day and down from $211.20 last week at this time.
Slaughter came in right on trade expectations at 125,000 head.
TheCattleSite News Desk