CME: Cattle on Feed Expected to Bring Lower Numbers as Futures Lift, Wednesday20 June 2013
US - Live cattle futures extended gains into the close on spillover from strength in the hog market, with futures closing 87 1/2 cents to $1.50 higher on Wednesday.
On top of spillover from hog futures, cattle futures were supported by ideas recent losses were overdone, giving traders encouragement to return nearby futures in line with last week's $120 cash cattle market, write market experts at ProFarmer.
August cattle closed sharply higher on the session and experienced the highest close since May 31st in spite of sluggish trade in beef, say staff at the CME.
The market traded near unchanged on the session into the pit opening but the market was up more than 100 points on the day into the mid-session and challenged Monday's highs.
A surge up in the hog market, heat in the forecast for the plains and talk that May placements should be down about 5 per cent from last year were all factors which helped to support.
Traders seem to be anticipating that cash cattle will trade $1.00 lower this week to $119.00 was seen as a negative factor but with some stability in the beef market this week, some traders see the possibility of steady/firm trade.
For the Cattle-on-Feed report on Friday traders see placements for the month of May near 5 per cent below last year due to tightening feed supply with marketings down about 2 per cent from last year.
This would result in June 1st on-feed supply near 96.25 per cent of last year.
Boxed-beef cut-out values at mid-session came in at $198.78, down $1.46 on the session.
Slaughter came in right on trade expectations at 124,000 head.
TheMeatSite News Desk