CME: After Weak Start, Futures Close Up, Wednesday21 March 2013
US - After a weaker start, live cattle futures firmed amid short-covering on ideas the downside was overdone and ended 30 to 95 cents higher, write market experts at ProFarmer.
Early pressure came on followthrough from Tuesday's losses that resulted in new lows for nearby contracts. But ideas the downside was overdone triggered short-covering into the close today.
April cattle pushed to a new contract low and closed sharply higher on the day and the key reversal from an oversold condition could attract some technical buying support, write reporters from the trading floor at CME.
In addition, April cattle put in a contract high on the session before the start of winter and put in a contract low on the first day of spring so natural cycle traders (91 day seasons) may also be attracted to cattle.
June cattle tested Tuesday's lows early in the day and also closed sharply higher on the day and closed into a new 3-session high.
Weakness in the cash market late yesterday and further weakness in the beef market yesterday and today helped to pressure. Talk of low placements for the monthly cattle-on-feed report for Friday helped to provide some underlying support and traders also see active volume in the boxed-beef market yesterday as a positive factor.
At 180 loads traded, this is the highest since February 27th. Demand concerns persist as traders see a cold forecast for much of the US as a negative demand factor.
Ideas that February cattle placements into feedlots may have been down 9 per cent from last year helped to provide some underlying support.
Cash cattle in the southern plains traded $125.00 late yesterday, down $2.00 from last week.
Boxed-beef cut-out values at mid-session came in at $192.94, down $1.24 on the session and down from $197.49 last week at this time.
Cattle slaughter came in below trade expectations at 119,000 head.
TheCattleSite News Desk