CME: Cattle on Feed Report Spurs Deferred Buying27 August 2013
August live cattle jumped 30 cents on Monday to $123.40, although winter and spring contracts lifted up to $1.10.
Friday's Cattle on Feed Report boosted traders after showing strength across all categories. Placements were up which pushed up far deferred values.
October cattle closed 72 points down from the highs of the day but managed to close slightly higher on the session, write market analysts at CME.
December and February cattle closed sharply higher on the day (up 95 and 85) but also closed well off of the early highs.
The sharp run up in corn helped to drive November feeder cattle sharply lower and this contributed to the sell-off.
In addition, the showlist is higher this week and beef prices were weaker at mid-session and this may have sparked selling for October cattle which is trying to carry a stiff premium to the cash market.
The market pushed sharply higher early today as futures reacted to the bullish Cattle-on-Feed report from Friday with December and February holding up stronger than the October. Traders see tightening feedlot supply into the 4th quarter as a bullish force but some see supply as somewhat ample during September.
Placements in July were at a five year low and down more than 10 per cent from last year which was much smaller than expected. Heat in the plains this week could be seen as a supportive force which will slow weight gains.
Boxed-beef cut-out values at mid-session came in at $195.69, down 50 cents on the day but up from $195.22 last week at this time.
Slaughter came in well below trade expectations at just 115,000 head which is sometimes a sign of weak demand from the packer.
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