Cattle Futures - Live Cattle Uneven

US - CME live cattle settled mixed, with February through June down on cash caution, fund selling and pre-Goldman roll activity.
calendar icon 28 February 2008
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Meanwhile, back cattle months' settlement varied due to profit taking after some contracts made new highs on Tuesday and support from CBOT corn that rose from morning lows.

Most beef contracts gained at the start on follow-through buying and cash optimism that generated forward positioning. Some deferred cattle months made new contract highs on the open despite CBOT corn's steep overnight plunge.

However, spot-February encountered resistance as traders built in this week's potential cash outcome. Also, the spot-month came under continued liquidation ahead of its Feb. 29 expiration.

Meanwhile, April's upward momentum stalled due to funds that moved long positions out of the nearby contract into June in preparation for the upcoming Goldman roll. April's losses mounted after the contract fell through key moving-average-support levels.

The U.S. Department of Agriculture's midday boxed beef item Wednesday quoted choice cuts up $0.52 per hundredweight and select items were reported $0.70 higher. Wholesale beef's strength might support spot-February on Thursday, a broker said.

However, some bullish traders fear that April's setback on Wednesday might jeopardize feeders' negotiations for higher cash cattle returns this week. Fed cattle bids and asking prices are curiously silent heading into the second half of the week.

Given April's huge open interest, more advance-Goldman roll business is anticipated on Thursday.

And spot-February's relevance as the lead contract will diminish even more on Thursday, the eve of the contract's expiration day.

Feeder cattle ended moderately higher on spillover buying, CBOT corn weakness and underlying technical backing.

February live cattle closed down 2 points at 93.22 cents a pound, and April ended 95 points lower at 94.55 cents.

March feeders closed up 32 points at 105.10 cents, and April ended 50 points higher at 108.20 cents.

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