CME: Cattle Futures Opened Higher on Monday16 July 2013
US - Cattle futures opened the week significantly higher with feeder cattle scoring triple-digit gains. On the other hand, lean hog futures settled moderately higher despite discouraging cash and product news.
October cattle managed to push moderately higher on the day and even matched the highest price since early May as a surge higher in feeder cattle due to weaker tone to the corn market helped support.
The trade also sees a tighter supply of market-ready cattle over the near-term as a positive force and speculative buying and fund buying continues. The rally came in spite of the weakness in the beef market and concerns for continued weak consumer demand for beef this week as East Coast consumption could take a hit.
High temperatures and humidity on the East Coast could slow the movement of beef through the pipeline and result in less "fill-in" purchases from retailers for this week. Less stressful conditions for feedlot cattle in the southern plains due to cooler temperatures and rain this week may be seen as a limiting factor for the upside.
The market is building a premium with talk that cheaper feedgrain prices may eventually lead to an expanding cattle herd which will pull supply off of the market for the second half of 2013. US beef exports to Japan in May were pegged at the highest level since October of 2003 with US exports to that country up 50 per cent from last year for the first five months of the year. This is impressive given the currency fluctuations.
Boxed beef cutout values were down 38 cents at mid-session to $191.15 which was down from $194.85 the prior week. Beef prices are lowest since April 23rd. Slaughter came in right on trade expectations at 122,000 hear.
TheCattleSite News Desk