CME: Summer and Fall Futures Firmer With Nearby Discounts, Monday14 May 2013
US - Live cattle futures gapped higher on the open, but the market later pared gains and ended narrowly mixed for the day with summer- and fall-month contracts firmer.
Nearby futures remain at a major discount to last week's mostly $126 cash cattle trade despite Choice boxed beef prices holding near-record levels above the $200 mark, signaling demand concerns remain close at hand.
June cattle pushed higher early in the session yesterday finding support from a positive tone for cash markets in the plains this week and talk of stronger packer margins. The surge in beef to new all-time highs is helping to boost packer profit margins and may spark improving demand from the packer.
A weak tone to beef markets late Friday (just off of all-time highs) and a cool and wet weekend across the central US this past weekend were factors which may have limited the buying support.
The USDA raised 2013 production in their supply/demand update due to higher weights in Friday's update. However, news that 2014 production is expected to be down 4 per cent helped to provide underlying support.
August feeder cattle were up early but pulled back into the mid-session due to a surge higher in old crop corn values.
Choice boxed-beef cut-out was down 23 cents at mid-session to $204.75 from $200.26 last week.
Select beef was up 92 cents to $192.12.
TheMeatSite News Desk