CME: Futures Close Lower Tuesday in Wake Of Monday Rise30 January 2013
US - Live and feeder cattle futures closed lower, pressured by profit-taking in the wake of Monday's surge forward, writes DTN livestock analyst John Harrington.
Feeder cattle lost more ground than their live counterparts. Lean hog contracts finished moderately higher, supported by constructive fundamentals.
Cattle futures closed moderately lower and near the lows as traders remain uncertain just how quickly we will see higher trade in cash markets. Beef is still in a seasonally weak time frame and this is offset by concerns for tightening supply just ahead. The market traded slightly lower early in the session consolidating the gains from yesterday.
A firm tone to the beef market, a general perception that the showlist supply of market-ready cattle will decline in the weeks just ahead and more positive technical action helped to support the market on the early break.
The tightening supply is expected to help support the beef market and traders expect higher cash prices into early February. Cash cattle is offered at $126.00 in Texas and $127.00 in Kansas this week but there have been no packer bids yet.
Positive export news this week and a supportive tilt to outside market forces with the strong stock market and growing optimism for the global economy has added to the positive tone.
Boxed-beef cut-out values came in at $187.03, down 58 cents from yesterday and down from $190.59 last week. Select beef was down 43 cents to $181.99. Slaughter for today came in below trade expectations at 123,000 head.
The cash cattle trade was not tested today with bids and asking prices poorly defined. Significant trade volume is unlikely to develop before Thursday or Friday.
According to the closing report, the Iowa hog base closed $1.60 lower compared with the Prior Day settlement ($82.63-$86.50, weighted average $84.14). Corn futures rose fractionally in the old crop contracts and fell 3 cents in the new crop contracts.
TheCattleSite News Desk