CME: Futures Higher Amid Tightening Supply14 August 2013
US - Live cattle futures saw followthrough buying on Tuesday, which propelled futures to multi-month highs. August live cattle finished 30 cents higher at $123.90.
Recent strength in the cash cattle market and tighter showlist estimates this week that are indicative of supply tightening to come lifted futures yesterday. Monday and Tuesday morning, both Choice and Select cuts rose in price, though movement was lighter yesterday, write ProFarmer analysts.
December cattle closed 50 higher on the day with some volatile and choppy trade but this was still the highest close since April 1st, say expert commentators at CME.
The market forged an initial upside breakout (up 90) but failed to hold that pulse up move into mid session and traded unchanged on the day.
Changing macro economic fortunes and increased volatility in feed market pricing might have served to trip up this morning's buyers, suggest CME analysts.
The early rally was due to renewed concerns that the industry is reconsidering the use of growth enhancers.
The range in December corn this morning was roughly 13 cents a bushel and the US currency also showed some significant strength. One could also suggest that renewed US tapering fears, rising interest rate signals and weak US equities might have prompted some cattle longs to bank profits and stand aside this morning.
Boxed-beef cut-out at mid-session was up $.23 to $190.51 and up from $187.17 last week at this time.
Slaughter came in below trade expectations for the second day in a row at just 120,000 head which can sometimes indicate that packer demand for live inventory is weak.
TheCattleSite News Desk