Cattle Futures - Live cattle ended higher
US - Chicago Mercantile Exchange lean hogs closed higher on short covering, July/August and August/October bull spreading and notions that processors may be strapped for supplies this weekend and early next week.
6 July 2007
2 minute read
Live cattle ended higher on August/October, August/December andOctober/December bull-spreading along with short covering, this week's cashs entiments and October fund buying. Futures made their way upward despite CBOTcorn's modest gains and midday boxed beef's lapse.
Spillover from Tuesday's run up, and that day's higher boxed beef values, notonly lifted live cattle contracts on the open but drove August beyond its key resistance obstacle. October also made headway after rolling through 40-daymoving average resistance.
However, August and October's upward momentum sputtered as both contracts approached their respective 40- and 100-day moving average thresholds. Also, afew August longs shifted into October in pre-Goldman Roll fashion as theclosing bell rang.
Fed cattle bids on Thursday were reported at $84 per hundredweight on a livebasis versus $90 to $91 asking prices. That will play on the psyche of marketbulls and bears alike who hope for a cash resolution before futures close onFriday.
Bullish traders believe Thursday's boxed beef misstep was a momentary setback. However, bears counter that wholesale beef prices haven't yet bottomedout given soggy weather in parts of the country over the holiday that dampenedgrilling in affected areas.
August's 90.95-cent 40-day moving average is the spot-month's resistance target for Friday. And the 95.41-cent 100-day moving is October's chart mark tobeat on Friday.
Locals were among August buyers. Fimat sold August and bought October outright. Rosenthal was an October buyer. JP Morgan was among October buyers.
Feeder cattle also ended higher on short covering, live cattle gains, and August/November and September/October bull spreads. That elevated August andOctober to five-week highs despite CBOT feedgrain's upswing and both contract'sbearish premiums to the exchange's feeder cattle index.
August live cattle settled at 90.70 cents a pound, up 72 points. Octoberended at 95.37 cents, a gain of 62 points.
August feeder cattle finished 62 points higher at 112.17 cents, and September closed 65 points higher at 113.15 cents.
Source: FXSTREET
