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CME: Longer Term Futures Close Down as June Lifts 20 Cents

15 May 2013

US - June live cattle futures ended 20 cents higher, while deferred contracts were steady to 47 1/2 cents lower.

With demand concerns continuing to hang over the cattle market, buying interest remains limited to light corrective buying despite the big discount summer-month live cattle futures hold to the cash market, write ProFarmer experts.

June cattle saw some choppy to higher trade early Tuesday and was trading just slightly higher on the day into the mid-session. However, weakness in deferred contracts sparked selling and August cattle closed moderatly lower on the day, say CME Market analysts.

Traders remain somewhat optimistic over the cattle price outlook with beef prices trading (and holding) near record high prices over the past week which has helped improve packer margins. Higher margins has helped support packer demand for live inventory and this may help packers feel more confident in paying steady or even higher for the cash market over the next few weeks.

The discount of futures to the cash market is discouraging new sellers. August cattle normally trade near a 100 point discount to the cash market at this time of the year and is currently near a 500 point discount.

Choice boxed-beef cut-out was up 78 cents at mid-session to $205.91 from $201.19 last week.

Select beef was up 41 cents to $192.24.

Slaughter came in slightly higher than expected at 124,000 head.


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