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CME: Futures Close Slightly Lower, Thursday

17 May 2013

US - Live cattle futures favoured a weaker tone in choppy trade and posted a mid- to low-range close to finish 5 to 25 cents lower.

Pressure on futures was limited by continued strength in the boxed beef market, but the inability of futures to rise with beef prices signals traders don't expect its strength to be long-lasting, write ProFarmer experts.

June cattle closed 10 points lower on the day and experienced the lowest close since April 15th. August cattle pushed to new contract lows.

Texas cash cattle traded $1.00 lower on the week to $125.00, report analysts at CME.

The market inched higher in quiet trade early today but speculative long liquidation selling emerged again to press the market down to trade slightly lower on the day into the mid-session.

New record high beef prices and the discount of futures to the cash market helped to provide some early support. Even solid gains in the hog market failed to provide much support. Open interest fell 6,416 contracts Tuesday and down 4,806 contracts yesterday to drop to the lowest level since November 1st.

This might suggest that speculative longs continue to liquidate. Weekly U.S. beef export sales for the week ending May 9th came in at just 4,700 metric tonnes, compared with the prior 4-week average of 13,475.

Cumulative sales for 2013 have reached 348,400 metric tonnes, down 11.8 per cent from last year's pace. Packer margins are highly profitable given the record high beef price but traders continue to expect weaker beef prices ahead and the technical action remains weak.

Choice boxed-beef cut-out was up $1.04 at mid-session to $208.99 from $205.49 last week which marks a new all-time high.

Select beef was up 48 cents to $193.23.

Slaughter came in right on expectations at 124,000 head.


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


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