CME: Futures Close Higher Forced Due to Snow, Monday12 February 2013
US - Live cattle futures ended 15 to 50 cents higher in all but the August contract, which ended 5 cents lower.
While traders remain concerned about last week's softer boxed beef values and the impact on packers' profit margins, futures were supported today by forecasts for winter storms moving into cattle county this week.
The higher close after moving to the lowest level since June 28th is seen as a positive technical development. The close was up 140 points up from the lows.
April saw an early sharp break to trade below the January lows but the selling dried up and futures were trading slightly higher on the day into the mid-session.
More talk that East Coast snow could slow the movement of beef through the pipeline this week and the move down to the lowest level since early August for beef prices helped to pressure.
In addition, the monthly USDA report on Friday 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 but sparked speculative long liquidation selling Friday and early today.
However, traders see a very active boxed-beef volume of trade (with improving export sales as well) as a reason to suspect that beef prices are near a low. A general sense that the fire-sale type action for beef this past week has helped to clean-up the pipeline helped to support.
The chart pattern now has the appearance of a spike-bottom low. There were 15 new deliveries posted over the weekend but all were taken by one house.
Boxed-beef cut-out values at mid-session came in at $182.39, up 27 cents on the session but down from $182.74 last week.
Friday's boxed volume was 217 loads. Slaughter came in slightly above trade expectations at 117,000 head.
TheCattleSite News Desk