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CME: Futures Settled Low With February/April Exceptions, Thursday

22 February 2013

US - Live cattle futures settled 10 to 47 1/2 cents lower, with the exception being the front-month February contract that closed 20 cents higher and the April 2014 contract that closed 5 cents higher, write market experts at Profarmer.

Futures were pressured by negative outside markets and concerns about demand. Sharp strength in the dollar index and weakness in the stock market resulted in a risk-off trading atmosphere in the commodity world today.

April cattle closed lower on the day after choppy and two-sided trade early but managed to see an inside trading session. June closed moderately lower.

Weakness in outside markets like grains, energy and stock markets plus another jump in the US dollar to a 5-month high has helped to trigger additional long liquidation selling, write analysts at the Chicago Mercantile Exchange.

While traders continue to believe that the USDA will not furlough meat inspectors and other key personal, the administration has given little in the way of assurances and this "uncertainty" has keep the market uneasy.

The CME has also announced that the spending cuts could also impact physical delivery and cash settlements for some of their livestock contracts. Traders see declining slaughter supply ahead but recent production has been higher than expected and weights remain high.

Central plains feedlots are being hit with 4-14 inches of snow Thursday into Friday and this is likely to slow weight gains and could disrupt marketings. Open interest was down 1,527 contracts yesterday.

Buyers are reluctant to step into the market with futures already holding a stiff premium to the cash and outside market forces and political uncertainty bearish.

Box-beef cut-out values at mid-session today reached $182.21, down $.10 from Wednesday and up from $183.68 last week at this time. Slaughter came in way below expectations at just 98,000 head.

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