Chicago Mercantile Exchange Live and Feeder Cattle Futures Close Lower

Strategic Insights -

Chicago Mercantile Exchange (CME) live and feeder cattle futures closed lower on Monday in reaction to late Friday's decline in cash live cattle values and expectations of additional summer seasonal price weakness in the coming weeks. The August live cattle futures settlement was 107 points lower at 82.92 cents per pound, while October live cattle futures declined 115 points to 86.57 cents. August feeder cattle futures fell 87 points to 113.35 cents. Trading volume was low, with some August longs tied to the Goldman Sachs commodity index and other "look-alike" accounts rolling into October. Short hedges were also rolling into October, according to floor sources. The U.S. Department of Agriculture is set to release the semi-annual cattle inventory report on Friday afternoon, which is expected to impact trading.

Key Takeaways:

  • Live and feeder cattle futures closed lower on Monday due to cash live cattle values and expectations of summer seasonal price weakness.
  • August live cattle futures settled 107 points lower at 82.92 cents per pound.
  • October live cattle futures declined 115 points to 86.57 cents, while August feeder cattle futures fell 87 points to 113.35 cents.
  • Trading volume was low, with some August longs rolling into October.
  • Short hedges were also rolling into October, according to floor sources.
  • The U.S. Department of Agriculture is set to release the semi-annual cattle inventory report on Friday afternoon.
  • Early analyst estimates for June monthly placement category vary widely, from 93.4% to 108% of last year's June placement.
  • Early on-feed figures, as of July 1, range from a 1.5% increase to a 4.6% gain compared to last year's July 1.
  • Feeder cattle futures fell despite lower feedgrain prices.
  • Comtex SmarTrend Alert reported an uptrend for CME on 12-22-2005 at $375.76.

Statistics:

  • August live cattle futures settlement: 82.92 cents per pound
  • October live cattle futures settlement: 86.57 cents per pound
  • August feeder cattle futures settlement: 113.35 cents per pound
  • Trading volume: low
  • Range of early on-feed figures as of July 1: -4.6% to +1.5% compared to last year's July 1
  • Range of early analyst estimates for June monthly placement category: 93.4% to 108% of last year's June placement

Sources:

  • Dow Jones Commodities News via Comtex (July 17, 2006)
  • Comtex News Network, Inc. (c) 2004-2006. All rights reserved.
  • Dow Jones Newswires (By Jim Cote, July 17, 2006)