CME: August Cattle Futures Post 35 Cent Gains, Wednesday29 August 2013
US - A day of strong futures saw gains cut at the close with gains between 20 and 37 1/2 cents higher with August futures at the higher end, up 35 cents to $123.30.
Analysts say this was supported by ideas about tighter supplies as boxed beef has inched higher.
Weakness in hogs, more long liquidation selling due to uncertainty over the near-term cash market action and the premium structure of the market are all factors which may have contributed to the late sell-off and weak close.
The market closed higher but well off of the highs with October closing 20 higher on the day but down 65 from the highs, CME analysts.
The market traded slightly higher early today and buyers stayed active into the mid-day with December and February cattle trading 55 higher on the day and the futures saw a test of Monday's highs. Heat over the next few days could slow weight gains and hold production down but traders also see sluggish demand.
While the short-term cash market activity is uncertain as the market absorbs a higher showlist this week, the outlook for tightening supply after 3-4 more weeks of normal supply has helped to support. The USDA has already projected 4th quarter production to be down 4.8 per cent from last year.
The surge in meal and to some extent corn prices in August could slow cattle placements which could reduce supply expectations for the Dec-Jan time frame.
Boxed-beef cut-out values at mid-session came in at $196.74, up 65 cents on the day and up from $195.46 last week at this time.
Slaughter came in slightly above trade expectations at 123,000 head.
TheCattleSite News Desk