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CME: October Live Cattle Closes up 65 Cents, Monday

24 September 2013

US - Live October cattle closed at $126.60, up 65 cents, settling with similar gains through to April.

The cattle on feed report was more bullish than expected, which had some rallying effect on the market. 

December cattle closed 75 higher on the session and saw the highest close since August 20th, say CME analysts. The market traded near 95 higher on the session into the mid-day and just shy of the August highs.

February cattle pushed over the August highs to the highest level since early March. A bullish Cattle-on-Feed report and talk that beef demand appears to be picking up from the summer doldrums helped to support.

August placements were down 11 per cent from last year and the lowest August placement total on record and this has re-ignited talk of significant tightness in supply later this year and early 2014.

Experts at CME say that talk that non-fed cattle and cow slaughter will continue to decline versus year ago levels added to the positive tone.

The COT reports as of September 17th showed Non-Commercial traders were net long 37,804 contracts, a decrease of 9,712 contracts for the week and the long liquidation selling trend was seen as a short-term negative force.

However, traders believe that the USDA report will halt the recent long liquidation trend and could rationalize new buying from fund traders. Boxed-beef cut-out values at mid-session today came in at $193.09, up 70 cents from Friday and up from $193.02 last week.

Slaughter came in right on trade expectations at 120,000 head. For the monthly cold storage report, frozen beef supply at the end of August came in at 433.8 million pounds which is down 6.2 per cent from the previous month and about unchanged from last year.

Stocks normally increase by about 1.2 per cent for the month so the 6.2 per cent decline is seen as a bullish number which might support the market.

TheCattleSite News Desk



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