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CME: Futures Lower After Choppy Trading Day

31 January 2013

US - Live cattle futures were choppy throughout the day and ended narrowly mixed according to market analysts at the Chicago Mercantile Exchange Group and Profarmer.

February cattle closed moderately lower with slightly lower closes for April and June cattle as the premium structure of the market and sloppy short-term cash fundamentals helped spark some long liquidation selling.

Cash cattle traded at $125.00 in Kansas and then Texas today which is up $1.00-$3.00 from last week's trade but well under February futures. February traded as high as 128.50 before closing at 128.00.

Cattle futures traded slightly lower early in the session with April down 25 points on the day but futures were back up to trade slightly higher on the day into the mid-session before choppy and two sided trade into the close write, Profarmer experts.

Traders continue to see a tightening supply ahead as a positive force but with futures at a premium to the cash already, weak beef prices (lowest since August 10th) and a near perfect weather outlook for the feedlot regions for the next ten days (mild temperatures and little or no rain for Kansas through Texas) leave little short-term reasons to attract new buying interest.

Traders see the cattle inventory on January 1st near 1.8 per cent lower than last year for the Inventory report on Friday.

This would be the 6th year in a row of lower inventory. Traders will keep a close eye on the heifer supply for beef cattle replacement as there is a wide range of estimates on both sides of year-ago levels.

With a tighter showlist this week, traders expected higher trade in the cash this week. Boxed-beef cut-out values came in at $187.06, up 17 cents from yesterday and down from $189.78 last week. Select beef was down 7 cents to $181.03. Slaughter for today came in well below trade expectations at just 119,000 head.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

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