CME: Live Texas Prices Make Futures Volatile, Wednesday23 May 2013
US - Live cattle futures opened under pressure and selling mounted as the day progressed.
Futures ended just off session lows with losses of 85 cents to $1.15, write experts at ProFarmer.
Selling picked up after midday on reports of light cash cattle sales in Texas at $124, down $1 from the bulk of last week.
June cattle gave back a good portion of yesterday's rally early on Wednesday as the early bounce failed to take out Tuesday's highs, say CME experts.
However, news that cash cattle traded weak sent the market sharply lower on the day late in the session with futures even dipping under 120.00.
Ideas that the rally was overdone on Tuesday helped to limit the buying support. Beef prices are up 10.5 per cent from last year and pushing new all-time highs but cash cattle in Texas traded at $124.00 yesterday which is down $1.00 from last week and up just 3 per cent from last year.
Continued weak action in futures has been very frustrating to supply-side bulls with the poor futures market action over the past several months. Beef is also up 22 per cent from levels seen in 2011 at this time of the year which cash is up 15 per cent .
The market found early support from yet another new high in beef prices late Tuesday. A rally in the corn market added to the negative tone and pressured feeder cattle futures. The discount to the cash market has failed to provide much support.
August cattle traded sharply lower on the cash market news.
Boxed-beef cut-out values were up 38 cents to $211.04 at mid-session as compared with $207.95 last week at this time and this is yet another new all-time high.
Slaughter came in slightly above trade expectations at 124,000 head.
TheCattleSite News Desk