Cattle Futures - Most Live Cattle Firm

US - Most Chicago Mercantile Exchange live cattle posted moderate gains Wednesday on short covering, oversold chart conditions for front months and spreads.
calendar icon 27 December 2007
clock icon 2 minute read
Live cattle mustered upward momentum at the start as shorts pocketed profits after recent board setbacks. Potentially bullish traders jumped on board due to December and February's oversold Relative Strength Index conditions.

Meanwhile, the U.S. Department of Agriculture's midday boxed beef wire exerted supportive influence. USDA quoted choice cuts up $0.19 per hundredweight and select items gained $0.72.

What's more, last Friday's bearish cattle report was absorbed into Monday's lower futures close - a move that several bullish traders argued was overdone.

Nevertheless, spot-December finished below positive trading territory due to 24 deliveries that were submitted by CME on Christmas Eve. Longs bailed out of December either outright or by spreading into nearby February as the spot month readies for expiration on Dec. 31.

And, spot-December bulls became nervous after a small number of fed cattle sold in Kansas at $91 per hundredweight on a live basis. No other packer bids were reported, and asking prices for remaining cattle stood at $93.00.

Remaining cash cattle may be pressured by the holiday-shortened workweek. On the other hand, the fewer number of cattle headed to processors this week is expected to underpin wholesale boxed beef demand.

A winter storm is expected to arrive in the Midwest by Thursday.

Feeder cattle ended weaker on carryover selling, Chicago Board of Trade feedgrain's rally and board premiums to CME's feeder cattle index. Continued board declines sank January and March to multi-month bottoms.

December live cattle closed down 35 points at 90.75 cents a pound and quietly drifted to an 11-month low. February finished up 42 points at 95.00 cents.

January feeders closed down 7 points at 103.50 cents. The contract earlier bottomed out at a 10-month low. March settled down 45 points at 105.02 cents, and at one point slid to a six-month bottom.

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