CME: Futures Gap Higher, Monday29 January 2013
US - Live cattle futures gapped higher on the open and didn't look back ending high-range with gains of $1.15 to $2.65, with nearbys leading to the upside, write analysts at Profarmer.
Live cattle futures benefited from both supply and demand news on Monday. Bulls were enthused by confirmation Japan will ease its U.S. beef import restriction to cattle aged under 30 months from its current 20-month limit. This should provide U.S. beef a major export boost in the years ahead, according to Profarmer.
February and April cattle closed sharply higher on the session and held on to most of the early strong gains. The bullish USDA Cattle-on-Feed report was enough to spark significant new buying and short-covering.
On top of the USDA news, traders also see increased demand for US beef ahead from Japan as Japan officials have agreed to allow US beef imports from cattle up to 30 months old starting on February 1st.
Restrictions or a total ban on US beef have been in effect since 2003 and since 2005, only cattle 20 months and younger were allowed. Japan was once the biggest market for US beef.
The US Meat Export Federation believes US beef exports for 2013 will jump to 2.73 billion pounds, up 9 per cent from 2012.
February cattle jumped to as high as 129.00 from 126.30 close on Friday. April pushed to as high as 133.70 from 130.75 close on Friday.
The cattle report on Friday showed much more active marketings than expected in December and showed placements of cattle into feedlots down from last year as compared with trade expectations for a 4 per cent increase.
Boxed-beef cut-out values came in at $187.14, down 30 cents from Friday and down from $189.84 last week. Select beef was up 40 cents to $182.26. Slaughter for today came in slightly higher than expected at 126,000 head.
TheCattleSite News Desk