Cattle Futures - Cattle Complex Drops On Corn Rally

US - Chicago Mercantile Exchange live and feeder cattle futures ended lower as Chicago Board of Trade corn contracts snapped back from opening lows fueled by worries over corn planting delays. Caution regarding this week's cash cattle trade also weighed on live cattle futures.
calendar icon 11 April 2007
clock icon 2 minute read
Despite positive fundamental signals, most lean hog were pressured throughout the session as April liquidators bailed out of the spot month outright or through spreads ahead of the contract's expiration on Monday. Meanwhile, CME pork bellies finished with significant advances ahead of the exchange's weekly belly storage survey that will be available on Tuesday after 4 p.m. CDT.

At first, live cattle futures were uneven at the start. Bullish market participants were emboldened by beef cutout's recent impressive performance and the prospect that this week's cash values will at least match last week's $100 per hundredweight live basis trade.

On the other hand, April live cattle buying interest dissipated amid sentiments that the spot month had already factored in cash business for this week and that beef processors will be reluctant to raise bids due to unsatisfactory calculated packer margins. What's more, the April cattle contract was a less-attractive buy as the trading month crept closer to overbought Relative Strength Index territory.

Floor traders on Wednesday will mull over live basis cattle asking prices from to $102 to 104 per hundredweight against bids that fell silent. This further heightened uncertainty on Tuesday about where both sides will reach a deal possibly later this week.

Technically, April displayed a bearish outside reversal after initially spiking at a four-week high and sagging below Monday's low before finishing lower on the day. June, during Tuesday's trade, recoiled after challenging 20-day moving average support.

Man Financial bought June live cattle. Cadent Financial sold June.

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.