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CME: April Futures Collapse Towards February Lows, Wednesday

21 February 2013

Live cattle futures ended $1.00 to $1.35 lower, though off session lows, write market experts at Profarmer.

Futures were again pressured by concerns about beef demand, as traders fear recent trade developments could temper export demand. Meanwhile, traders the boxed beef market is signaling a short-term low may be in place or at least close.

April cattle closed sharply lower on the session and did not recovery off of the mid-session lows like hogs and other markets. News that cash cattle traded in Texas at just $123.00 was seen as a negative factor, report experts from CME.

The market saw choppy and two-sided trade early on Wednesday as traders saw the uptick in beef prices and the weather forecast for the plains as potentially supportive forces. In addition, boxed-beef sales volume was very large Tuesday and is seen as a positive force.

Selling emerged to drive the market sharply lower. While grain markets were firm, traders noted sharp drops in gold, silver, copper, crude oil and other energy markets plus stock market weakness as signs of weaker commodity markets and this may have added to the negative tone.

April cattle collapsed to test the February 14th lows into the mid-session. Traders were taking a wait and see attitude for the weather and beef stability news but further weakness in hogs and other commodity markets may have been enough to spark another round of long liquidation selling from speculators.

Cash traded at just $123.00 last week and news of steady trade came as a disappointment to many traders.

Boxed-beef cut-out values at mid-session Wednesday reached $182.91, up $.44 from Tuesday and up from $183.45 last week at this time.

Slaughter came in higher than expected at 122,000 head which is sometimes a positive indicator.

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