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A weak trend for the beef market and demand concerns remain the bearish short-term forces which sparked massive long liquidation selling from fund traders. Strong gains overnight in the US stock market may lift these demand fears, and slow or stop the fund selling for now. Boxed beef cutout values were down 50 cents at mid-session yesterday, and closed 68 cents lower at $166.14. This was down from $167.91 the prior week, and is the lowest beef market since April 9th. It will be important to see some stability in beef prices and cash cattle prices in order to ease the long liquidation trend. The cattle market closed sharply higher on the session yesterday, but had a fairly tight range (40 points in June) after the day session opening. Overnight strength in the stock market and less pressure coming from outside market forces helped boost the market early, and futures recaptured a good portion of their losses from Tuesday. Ideas that the US economic outlook could improve “if” the situation in Europe calms down helped to provide some support. The estimated cattle slaughter came in at 130,000 head yesterday. This brings the total for the week so far to 387,000 head, down from 390,000 head last week at this time but up from 264,000 head a year ago. Kansas cash cattle traded at $93.00 to $94.00, which is down $1.00-$2.00 from late last week and down sharply from early last week. Packers have one less day for slaughter next week, and this may have kept bids down. Open interest was down 3,525 contracts on the session yesterday, making for a decline of near 32,500 contracts in just 11 trading sessions.
TODAY’S GUIDANCE: Relief in selling for the equity markets could slow the long liquidation trend and allow the market to bounce. Technically, there is still no sign of a near-term low but traditional indicators are oversold and the supply fundamentals look somewhat favorable.
TODAY’S MARKET IDEAS: Key resistance for August cattle comes in at 91.20 and then 92.02, with key support back at 88.12. Look for a bounce to 92.00.
Cattle Market Commentary – 2010.05.27
by Terry Roggensack on May 27, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
A weak trend for the beef market and demand concerns remain the bearish short-term forces which sparked massive long liquidation selling from fund traders. Strong gains overnight in the US stock market may lift these demand fears, and slow or stop the fund selling for now. Boxed beef cutout values were down 50 cents at mid-session yesterday, and closed 68 cents lower at $166.14. This was down from $167.91 the prior week, and is the lowest beef market since April 9th. It will be important to see some stability in beef prices and cash cattle prices in order to ease the long liquidation trend. The cattle market closed sharply higher on the session yesterday, but had a fairly tight range (40 points in June) after the day session opening. Overnight strength in the stock market and less pressure coming from outside market forces helped boost the market early, and futures recaptured a good portion of their losses from Tuesday. Ideas that the US economic outlook could improve “if” the situation in Europe calms down helped to provide some support. The estimated cattle slaughter came in at 130,000 head yesterday. This brings the total for the week so far to 387,000 head, down from 390,000 head last week at this time but up from 264,000 head a year ago. Kansas cash cattle traded at $93.00 to $94.00, which is down $1.00-$2.00 from late last week and down sharply from early last week. Packers have one less day for slaughter next week, and this may have kept bids down. Open interest was down 3,525 contracts on the session yesterday, making for a decline of near 32,500 contracts in just 11 trading sessions.
TODAY’S GUIDANCE: Relief in selling for the equity markets could slow the long liquidation trend and allow the market to bounce. Technically, there is still no sign of a near-term low but traditional indicators are oversold and the supply fundamentals look somewhat favorable.
TODAY’S MARKET IDEAS: Key resistance for August cattle comes in at 91.20 and then 92.02, with key support back at 88.12. Look for a bounce to 92.00.
Tags: Cattle
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