CME: Nearby Futures Post Gains, Monday13 August 2013
US - Live cattle futures posted anywhere from a low- to high-range close and finished 25 cents to $1.10 higher, with nearbys leading gains after news of smaller corn crop forecast.
Early support came from $1 to $2 higher cash cattle trade late on Friday at $121 in the Southern Plains, write CME analysts. This raised expectations the cash market has posted a lowm, say ProFarmer experts.
Continued talk that other packers have not followed Tyson in banning Zilmax has caused traders to feel that the overall impact on weights and production may be muted, write CME analysts.
In fact, some traders believe that unless Tyson can come up with better evidence over cattle health and Zilmax that they may be forced to accept cattle with the treatment soon.
October cattle pushed higher early in the day and managed to hold the early gains for much of the day to close moderately higher on the day. The market traded near unchanged on the day into the pit opening but managed a firm rally into the mid-session to take out Friday's highs. The market closed at the highest level since early April.
CME analysts says that ideas that the beef market can push up over the near-term as retailer's book beef for the Labor Day weekend helped to provide underlying support.
Cash cattle in Kansas and Texas traded at $121.00 last week, up $2.00 from the previous week. There were 20 new deliveries which were seen as a limiting factor for the cash market this week but news that a strong stopper took the 30 re-deliveries from Friday helped to support. A firm boxed-beef cut-out trade late Friday helped to support as well.
Boxed-beef cut-out at mid-session was up $1.04 to $190.03 and up from $186.46 last week at this time.
Slaughter came in well below trade expectations at just 115,000 head which can sometimes indicate that packer demand for live inventory is weak.
TheCattleSite News Desk