Cattle Futures: Live Contracts Sharply Higher, Tuesday23 October 2013
US - Gains were seen across live cattle futures, led by the December contract, which built through Tuesday to close at highs.
December closed $1.07, while the smallest gain was 40 cents. October live cattle closed at $131.10, up 97 cents.
This surge was prompted by further gains in wholesale beef prices, according to ProFarmer market experts.
Wholesale gains will pressure packer margins, possibly providing cash bid support earlier in the week, add ProFarmer analysts.
December cattle closed sharply higher on the session as demand fears eased due to the weaker dollar, talk of a better than expected global economy and ideas that the Fed will continue to pump liquidity into the system.
The market was only slightly higher on the day early but buyers continued to remain active and the market slowly rallied all day.
Traders see higher beef prices as a sign of improving consumer demand ahead even though beef is near a record high.
The market pushed back up to more than half of Thursday's range with the bounce today and there has been no technical confirmation of the sweeping downside reversal from Thursday. The jump in beef prices has traders more confident that futures can continue to trade at a premium to cash and that the cash market can continue in an uptrend.
Choice boxed-beef cut-out values from the USDA on the mid-day wire came in at $199.79, up $1.50 from yesterday. Slaughter came in above trade expectations at just 123,000 head.
TheCattleSite News Desk