June 14, 2011


US live cattle futures in rebound

 


As a result of traders exiting short positions, US cattle futures climbed in a rebound on Monday (Jun 13).


CME live cattle for June delivery settled up 0.475 cent to US$1.032 per pound while the August contract closed up 0.55 cent, or 0.5%, to US$1.04025 per pound.


Feeder cattle for August rose 1.15 cents, or 0.9%, to US$1.24775. The market's gains, despite weakness in most other commodities, were due mostly to traders exiting short positions, analysts said. The market "got beat up pretty hard" on Friday, said Narciso Perez of Narciso Perez Cattle and Trading.


An increase in boxed-beef prices added support, although analysts said worries about demand are limiting the market's upside potential. A sluggish economy does not bode well for demand for beef, which some consumers shun in favour of cheaper meat when budgets are tight. Analysts also noted weakening packer margins.


Prices could soften in the coming weeks as more cattle, at heavier weights, enter the market, Perez said.

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