CME: Futures Follow Through to Post Gains on the Week, Friday18 February 2013
US - Live cattle enjoyed follow through from yesterday's gains to post slight gains for the week on Friday.
The market still has a lot of work ahead of it in order to signal a major low has been posted. Key to building on late-week gains in live cattle futures are traders' perception of demand.
The boxed beef market is still searching for a seasonal low, which raises questions about demand.
April cattle closed 67 points higher on the session and managed to close 32 points higher on the week. The market was down as much as 72 points early in the session but held support and pushed higher on the day to trade up 50 on the day into the mid-session.
Traders sense a low in the cash market this week as a steady tightening in supply is expected over the next several months. Low placements in the fall, a shift to a snowy outlook for feedlot regions for the next week and some stability in beef prices this week helped to support the more active buying on Friday.
May Feeder Cattle saw follow-through buying support from the key reversal yesterday to trade as much as 130 higher early today which helped to support the market as well before closing 72 higher on the day but 52 lower for the week.
Traders see cash cattle trading better than $123.00 next week which is where cash moved to this week and was down $2.00 for the week. August cattle was slightly higher on the session as well and the higher trade is seen as a positive technical development after the market posted new contract low yesterday and also experienced a key reversal.
Traders see smaller than normal slaughter on Monday for Presidents Day holiday. Last year, slaughter was 104,000 head on the holiday.
Short-covering ahead of the 3-day holiday was seen as a positive factor.
Slaughter came in below trade expectations at 110,000 head.
TheCattleSite News Desk