CME: Futures Post Big Gains in Expectation of Grilling Weather, Wednesday25 April 2013
US - Live cattle futures ended just off session highs with gains of 72 1/2 cents to $1.32 1/2.
Live cattle futures benefited from growing expectations that grilling season is about to pick up, lifting the boxed beef and cash markets, write ProFarmer analysts.
Recent improvement in beef demand amid a more favorable weather outlook has spurred such ideas.
June cattle closed 125 higher on the session and experienced the highest close since April 4th. The market traded sharply higher early in the day and pushed up to the highest level since April 9th as traders seem convinced that cash cattle can trade $126.00-$127.00 this week, say experts at CME.
Ideas that the weekend weather could spark improving beef demand plus the recent bounce in beef prices has helped to provide support. With the market oversold and discount to the cash market, traders also see the chance of increased short-covering over the near-term. Beef prices late yesterday pushed to the highest level since April 4th.
The central part of the country is expected to see sunny and warm weather this weekend which could spark improving demand from consumers for grilling and this helped to provide some support as well.
Poor profit margins for the packer plus talk that there is a higher showlist this week were seen as factors while might limit the advance.
Choice boxed-beef cut-out values at mid-session were down 11 cents to $191.30 as compared with $191.33 last week at this time.
Select beef prices were up $1.24.
Slaughter came in slightly above trade expectations at 123,000 head which could be a sign of firm packer demand.
TheCattleSite News Desk