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CME: Spring and Summer Futures Dip Amongst Corn Concerns

30 April 2013

US - Live cattle futures favoured the upside in choppy trade for most of Monday's session and the market ended mixed with spring- and summer-month contracts 5 to 20 cents lower and deferred months steady to 30 cents higher.

Live cattle futures were initially supported by higher cash cattle prices Friday, but this faded as the day progressed and the market grew concerned about the strong rally in the corn market, write market experts at ProFarmer.

June cattle closed 5 points lower on the session and down 70 points from the peak. A strong rally in the cash market last week and more up in beef on yesterday helped to provide underlying support but weakness in feeder cattle due to a limit-up move in corn helped to limit the buying and sparked some long liquidation selling in cattle.

The market experienced choppy to lower trade into the pit opening but was trading 60 higher on the day into the mid-session and up to the highest level since April 4th, according to CME experts.

Higher cash cattle trade on Friday, higher beef prices over the weekend and a lack of new deliveries against the April contract this morning helped to support the bounce.

Weekend consumer demand for beef was thought to be better than most this past weekend but traders see cold and wet weather into the coming weekend as a potential negative development.

Boxed beef cutout values were up $1.35 on Friday to $192.89 which is up from $190.10 the prior week and is the highest beef market since March 21st.

Cash cattle traded at $128.00 in Texas, up $2.00 from the previous week and Kansas traded as high as $128.50 and Nebraska saw cash trade at $128.00-$130.00.

The firm cash clashes with the discount of futures to the cash market and helped to support. Strong gains in the stock market, a jump in some commodity markets and an 8-session low in the US dollar were all seen as positive forces.

Choice boxed-beef cut-out values at mid-session were up $1.41 to $194.30 as compared with $190.78 last week at this time.

Slaughter came in slightly below trade expectations at 119,000 head.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

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