CME: Choppy Trade Sees Futures Drop 10 Cents, Monday23 July 2013
US - Live cattle futures marked choppy action today with the lead-month August contract trading on both sides of Friday's range, closing down to $121.87.
August ended down 10 cents in a mid-range close. Deferred contracts slumped in late trading, closing in the lower third of their range, 17 1/2 to 52 1/4 cents lower, write Profarmer analysts.
Traders turned their attention back to the live and wholesale markets after quickly digesting the data from Friday's Cattle on Feed Report, which came in generally as expected. Traders are waiting for a seasonal low in boxed beef market.
October cattle closed 60 lower on the session and down near the low end of the July trading range, say experts at CME.
A weaker demand tone and ideas that it may take time and lower beef prices to stimulate consumer demand helped to spark the long liquidation selling.
The market had a steady to higher trade ahead of the pit opening but speculative long liquidation selling emerged to drive the market down as much as 90 lower on the day early. The market recovered from the early lows to trade just 25 lower on the day into the mid-session.
Most traders viewed the USDA Cattle-on-Feed report as neutral to slightly positive but more talk of sluggish beef demand last week and the potential impact on the cash market for this week helped to spark the selling as futures continue to hold a healthy premium to the cash market.
Traders see the slow beef movement last week as a reason to suspect a less aggressive buying tone from packers for live inventory for this week.
October feeder cattle pushed up to the highest level since March 1st which helped to provide some underlying support.
Boxed-beef cut-out values at mid-session came in at $188.55, down 67 cents on the day and down from $190.70 last week at this time.
Slaughter came in below trade expectations at 120,000 head which can sometimes indicate weak demand from the packer.
TheCattleSite News Desk