Cattle Futures - Live Cattle Sink

US - CME live cattle closed lower on technical-oriented selling after August andOctober drifted below key moving average support levels, spot-Augustliquidation prior to the contract's Aug. 31 expiration, and August/October bulland October/December bear spreads. That weighed more on October but slowedAugust and December's descent.
calendar icon 8 August 2007
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Live cattle futures opened contrary to mostly higher calls that were drivenby last week's positive fed cattle results, CBOT corn's overnight lapse andboxed beef cutout's gradual improvement.

The U.S. Department of Agriculture's midday boxed beef cutout wire Tuesdayquoted choice cuts up $0.37 per hundredweight and $0.34 select gain.

Instead, traders followed the path of least resistance that was paved withlooming deliveries ahead of spot-August's expiration and buyer uneasiness aboutOctober's premium to recent cash results. Also, lean hog's surprising drop andCBOT corn's eventual upswing hastened live cattle's pullback.

Cattle bears speculate that Tuesday's board downturn could make packers thinktwice about current $92 per hundredweight bids and threatens $94 to $95 askingprices.

By the same token, bullish players contend bids and asking prices shouldstand pat given recovering estimated packer profit margins and progressingwholesale beef demand.

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