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CME: Futures Lower to $1.22, Friday

08 April 2013

US - Live cattle futures finished 65 cents to $1.22 1/2 lower on Friday and sharply lower for the week.

The low-range close for the week in cattle futures sets the stage for follow through selling this week. The discount nearby futures hold to the cash market should limit selling pressure, but this could be a case where futures dictate cash trade, say market experts at Profarmer.

June Cattle closed 85 lower on session and down 287 lower on the day, say experts at Chicago Mercantile Exchange. The market saw follow-through Friday morning and pushed down to the lowest level since March 27th.

The market found moderate selling pressure from a sharp break in the US stock market following poor economic news. Traders are concerned that beef prices are not keeping up with the cash market rally and that packers might cut-back on slaughter in an attempt to support margins.

Slaughter was higher than expected but without a further bounce in the beef, traders see weaker cash market trade next week. Demand uncertainties remain as a short-term negative force as traders indicated that this morning's employment report showed the smallest work force participation rate since May of 1979.

Some research studies on cattle and beef prices use per employed person instead of per capita numbers when looking at demand.

Boxed-beef cut-out values at mid-session today came in at $191.69, down 3 cents from yesterday but up from $189.05 last week at this time.

Slaughter came in below trade expectations at 113,000 head.

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

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