CME: Cattle Futures Surge Following Tyson Foods Zilmax Announcement, Thursday09 August 2013
US - Live cattle futures posted gains of 87 1/2 cents to $2.40 through the August 2014 contract on Thursday, though that was only good for a mid- to low-range close as August live cattle closed at $122.67.
Cattle futures surged yesterday as traders reacted to news Tyson Foods plans to suspend purchases of cattle fed Zilmax as of Sept. 6. Feeder cattle futures finished 92 1/2 cents to $1.70 higher through the January contract on strong spillover support from live cattle, write analysts at ProFarmer.
October cattle traded as high as 127.67 early this morning (limit up) but similar to recent trading days, the early rally has failed to hold with the market closed up 240 on the day and down 60 from the peak, say CME experts.
News from Tyson Foods that they will suspend the purchase of cattle (beginning September 6th) which has been fed the growth enhancer Zilmax was the primary force to push cattle up the limit.
However, the drop off in deliveries overnight, talk of a strong stopper taking the early deliveries, a jump in beef prices over the past week and continued talk of improving beef demand due to better weather and retail interest building for the Labor Day holiday are all other factors which have helped support.
Weekly U.S. beef export sales for the week ending August 1st came in at 8,900 metric tonnes, compared with the prior 4-week average of 14,025.
Cumulative sales for 2013 have reached 490,500 metric tonnes, down -17.7 per cent from last year's pace.
Boxed-beef cut-out at mid-session were down $0.34 to $188.32 but still up from $186.66 last week at this time.
Slaughter came in near trade expectations at 122,000 head.
TheCattleSite News Desk