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Cattle Futures: Strong Gains, Tuesday

27 November 2013

US - Buyers were attracted by talk of a shrinking supply side with December live cattle closing up 87 cents to $131.95.

February cattle closed 122 higher on the session and broke out to the upside of a 5-day consolidation.

Technical buying was active and the longer-term outlook for tightening supply continues to attract buyers. The jump in beef prices this week increased the chances of steady to higher trade in the cash market this week.

Talk of declining beef supply ahead helped to support new buying and so did ideas that the recent sharp break was overdone.

Choice boxed-beef cut-out values at mid-session came in at $201.19 which is down $.13 from Friday but still up from $199.02 last week at this time.

Select beef was up 43 cents. While margins are still weak for packers, they have improved this week from recent deep-in-the-red levels and this provided underlying support.

Slaughter came in well above trade expectations at 125,000 head which can sometimes be a sign that packer demand is improving.

TheCattleSite News Desk

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