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CME: Futures Collapse After Low Cash Demand, Friday

11 February 2013

Live cattle futures got off to a choppy start, but the market softened ahead of midday and ended $1.10 to $1.40 lower, which was at or near session lows, write market experts at Chicago Mercantile Exchange.

Feeder cattle futures plummeted to end $2.20 to $2.62 1/2 lower. Most live and feeder cattle contracts ended with sharp losses for the week. Cash cattle trade got started at $125 today, steady with last week, after the boxed beef market faltered around midweek, write experts at Profarmer.

April cattle saw choppy and two-sided trade early today but closed sharply lower on the day and even dipped under 130.00 temporarily. Cash markets traded at $125.00 in the plains. Bids were at $123.00 yesterday with offers at $127-$128 as compared with trade last week at $123-$124.

Ideas that weekend beef demand on the East Coast could be sluggish and slow the beef pipeline down helped to pressure. A lack of deliveries for the past two days was seen as a positive for the cash market but after cash traded slightly higher, long liquidation selling emerged to drive futures sharply lower.

Beef prices were lower late yesterday for choice beef but higher for select beef. May feeder cattle stayed under heavy selling pressure even with weakness in grain markets. Boxed-beef cut-out values were down $1.19 at mid-session to $182.27 which is down from $182.56 last week.

Select prices were down $1.06 to $180.07 as compared with $178.62 last week at this time. Slaughter came in well below expectations at just 108,000 head which is sometimes a sign of weak demand from the packer.

The monthly USDA report showed a revision higher in 2013 beef production of 1.2 per cent to 25.191 billion pounds which is still down 3.1 per cent from last year.

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

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