CME: Weak Grains Cause Early Futures Surge Before Closing Lower14 March 2013
US - Live cattle futures were unable to hold earlier gains and finished mostly 15 to 50 cents lower, which was in the lower end of Wednesday's range, write market analysts at ProFarmer.
Uncertainty with cash cattle trade this week and ongoing demand concerns eroded buying interest late in the session. Traders are taking a prove-it attitude as the market works to put in a low.
April cattle closed slightly lower and June closed down with an outside-day down as the sharp break in hogs gradually pulled cattle lower, according to CME's daily report. Weakness in grains helped support a higher close for feeder cattle.
Traders appear disappointed with the lack of buying interest in cattle given the surge in beef prices over the past ten days. The market saw moderate gains into the mid-session through Wednesday with the market up to the highest level since March 6th.
Record high prices for select beef have helped mend packer profit margins and traders see a positive trend for cash cattle ahead as supply tightens into the spring. There were still no bids in the cash market this morning with offers at $130.00.
The weather may have brought out a few more cattle available for slaughter this week but the jump in beef prices is the focus.
Weakness in grains and a surge in the US dollar were seen as factors which helped to limited the advance.
In addition, a much warmer and drier trend for the central plains was seen as a bit of a slight negative as weight-gain looks near optimal.
For example, Dodge City Kansas temperature highs for the next 10 days range from 59 to 82 degrees with mostly sunny weather and very little chance of any rain.
Above normal temperatures for next week for the southeastern US is seen as a supportive factor for demand. Cattle slaughter came in at 121,000 head.
TheCattleSite News Desk