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CME: Futures Strengthen as Demand and PMI Rise

03 June 2013

US - Live cattle futures strengthened on Friday as the day progressed and ended 50 cents to $1.40 higher for the day and moderately higher for the week.

Feeder cattle futures firmed late to end with slight gains for the day and the week, write ProFarmer analysts.

The market responded positively to the start of cash cattle trade at steady prices of $124 in the Southern Plains on Friday, as nearby contracts remain at nearly a $3 discount to these prices.

August cattle closed 115 higher on the session and up 98 on the week, write CME experts. The market pushed slightly higher in early trade on Friday as firm export sales and positive consumer sentiment readings helped to provide some support.

In addition, the discount to the cash market helped to provide some support but trade was slow as traders are a bit cautious due to the lack of cash cattle trade so far this week. Packers were bidding $124.00 in Kansas and still no trade.

Texas traded $124.00 which might have sparked some of the buying due to discount of futures to cash. The University of Michigan consumer-sentiment index for May jumped to 84.5, the highest since July 2007 and up from 76.4 in April.

The Chicago PMI number was also impressive at 58.7 given expectations for a number near 50. The positive tone to sentiment is a supportive factor for consumer demand for beef. Weekly U.S. beef export sales for the week ending May 23rd came in at 19,000 metric tonnes, compared with the prior 4-week average of 4,200.

Cumulative sales for 2013 have reached 358,300 metric tonnes, down -16.6 per cent from last year's pace.

Boxed-beef cut-out values at mid-session came in at $207.31, down $1.24 on the day and down from $211.37 last week at this time.

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

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