Cattle Futures - Live Cattle Slumps On April Liquidation

US - Chicago Mercantile Exchange live cattle futures finished lower Wednesday on April liquidation due to spot-month speculative limit requirements, sell stops and June selling after the contract was unable to hold above major moving-average support levels.
calendar icon 12 April 2007
clock icon 2 minute read
While active spreading out of far months into April and June at times offered front-month support, the move took the starch out of deferred contracts despite Chicago Board of Trade corn's withdrawal. Feeder cattle also settled down in reaction to live cattle declines.

The exchange's lean hog market ended the day primarily in the green amid a lackluster spread trade and as the April contract preps for its expiration on Monday. Pork bellies posted modest gains by session's end.

Absentee live cattle buyers at the start prompted futures to fall that tripped sell stops in the process. April selling was exacerbated by spot-month traders who continue to whittle down some of their speculative long positions in accordance with exchange requirements.

Bullish cattle participants were also scared off by overnight electric-CBOT corn's modest overnight gains and the prospect that soggy and cold planting conditions in the Midwest might support corn prices.

Nonetheless, prospective live cattle buyers entered the fray after the April contract failed to fill its most recent chart gap, and June bounced off key moving-average support levels before ultimately acquiescing.

Additionally, market bulls were later heartened by midday choice and select boxed beef quotes that surged another $4.04 and $2.38. Spotty cash and dressed cattle sales that were $2.00 per hundredweight above last week's trade also gave long-position holders a reason to buy breaks.

On Thursday, CME traders will watch as cattle owners dig in their heels at $102 to $104 and buyers proffer counter-bids ranging from $96 to $97.

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