CME: Stock Market Weakness Drives Cattle Buying, Wednesday22 August 2013
US - August cattle closed 30 cents lower at $124.15 and October cattle down 17 following a jump in the dollar and 'sensitive trading'.
October cattle closed 17 lower on the session after choppy and 2-sided trade early in the day, write analysts at CME.
Weakness in the stock market and a jump in the US dollar sparked some selling in economic sensitive commodity markets which were technically overbought such as cattle.
Traders see the possibility of steady supply and somewhat weaker demand after retailers book for Labor Day holiday so there seemed to be some long liquidation selling pressure.
In addition, there are concerns that the October premium may be a bit too high.
The market found support from continued talk that the cash market may trade higher this week. Traders see feedlot supply down for the 12th month in a row for the Cattle-on-Feed report for Friday.
Supply on August 1st is expected to be down about 4.0-4.5 per cent , July placements down 1.0-1.5 per cent and marketings up about 4.5 per cent from last year.
Boxed-beef cut-out values at mid-session came in at $195.27, down 33 cents on the day but still up from $192.35 last week.
Slaughter came in slightly above trade expectations at 124,000 head
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