Cattle Futures - Live Cattle Weaker

US - CME live cattle settled weak on cash anxiety, February/April bull and April/June bear spreads, and CBOT corn's slide.
calendar icon 13 February 2008
clock icon 2 minute read
Live cattle contracts began the day flat to up slightly on continued supportive wholesale beef demand that fueled speculation about steady-to-better cash prices this week. What's more, profitable calculated packer profit returns fed into confidence about this week's potential cash result.

Meanwhile, speculative bulls showed only token interest in far-month live cattle due to CBOT corn contracts that traded mixed overnight, then turned weaker, which ultimately weight on cattle contracts.

Subsequent front-month live cattle upward momentum soon stalled as uneasiness about this week's cash outcome gradually materialized. And, a few spot February longs bailed due to the contract's Feb. 29 expiration and potential deliveries.

The USDA's midday Tuesday boxed-beef wire showed another $1.40 per hundredweight choice cut jump and select items gained $0.75.

Solid wholesale beef sales are partly behind $94 per hundredweight live-basis cash cattle asking prices that cropped up Tuesday. So far, packers are silent.

Until packer buyers and cash cattle sellers can agree on a price to facilitate the exchange of supplies, February and April cattle futures on Wednesday may again vibrate between technical resistance and support levels.

Feeder cattle closed moderately lower on live cattle's slippage, initial profit-taking and April fund liquidation.

Spreaders also sold April and bought March that outpaced funds' attempt to move some of their spot March long positions into April on the fourth of five days for the Goldman roll. The roll is done in association with the Goldman Sachs Commodity Index.

February live cattle closed down 25 points at 91.92 cents a pound, and April closed down 32 points at 94.77 cents.

March feeders closed down 15 points at 105.75 cents a pound, and April ended 75 points lower at 109.75 cents.

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