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CME: June Cattle Closes Down as Dollar Surges to Pressure Futures, Wednesday

21 June 2013

US - Live cattle futures opened under pressure on spillover from the commodity-wide sell-off prompted by the surge in the U.S. dollar and decline in equities.

June Futures closed 52 cents lower, finishing the day on $119.95.

However, losses were moderate and were slowly trimmed in late trade, write market analysts at ProFarmer.

Futures closed near the day's highs. The collapsing stock markets and surging U.S. dollar index proved the primary driving force behind live cattle futures trade at the opening.

August cattle pushed moderately lower on the session early yesterday as the market followed direction from outside market forces, say analysts at CME. A surge higher in the US dollar, a sharp break in the US stock market and weakness in most other commodity markets helped to pressure.

Weakness in the beef market late on Wednesday and ideas that retailers will soon be done with booking holiday meat demand helped to spark some selling as well. However, by late in the session the market had recovered a good portion of the losses and was trading down as little as 25 points on the session late.

Traders viewed Wednesday's rally as overdone with no signs of better beef or cash market outlook to help support. However, the market also seems to be experiencing a lack of aggressive selling. Even with a sharp break in grain markets, feeder cattle were lower as traders seem to fear the impact of a weaker global economy on demand.

For the Cattle-on-Feed report on Friday traders see placements for the month of May near 5 per cent below last year due to tightening feed supply with marketings down about 2 per cent from last year.

This would result in June 1st on-feed supply near 96.25 per cent of last year. Weekly U.S. beef export sales for the week ending June 13th came in at just 9,000 metric tonnes, compared with the prior 4-week average of 16,300.

Cumulative sales for 2013 have reached 393,100 metric tonnes, down 17.9 per cent from last year's pace. Boxed-beef cut-out values at mid-session came in at $198.69, down $.29 on the session.

Select beef was up $1.18 to $185.87 from $184.37 last week at this time.

Slaughter came in right on trade expectations at 124,000 head.

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