Higher Cash Hopes Send Live Cattle Futures Soaring

Strategic Insights -

Chicago Mercantile Exchange live cattle futures jumped to new contract highs in August and neared the mark in June as beef packers are expected to battle for supplies next week. Early trade was active, with fund buyers propelling contracts to new highs in fast market mode. The June live cattle contract rose by $1.65 to $87.32 at 10:23 CT (15:23 GMT), driven by widespread buying from major fund names and spreaders assisting long June and August versus short deferred month positions.

Key Takeaways:

  • Beef packers are expected to battle for supplies next week, leading to higher cash hopes and driving live cattle futures to new contract highs.
  • Early trade was very active, with fund buyers playing a significant role in the rally.
  • Major fund names such as Man Financial, Rosenthal, Refco, and RJ O'Brien participated in the buying, contributing to the surge in live cattle futures.
  • Spreaders assisted long June and August versus short deferred month positions, further fueling the rally.
  • The June live cattle contract rose by $1.65 to $87.32 at 10:23 CT (15:23 GMT).
  • Cargill and RJ O'Brien were among the early buyers of June live cattle futures.
  • Rosenthal purchased August feeders, taking advantage of the rally in feedgrains.
  • Feedgrain prices trimmed most of the gains in feeder contracts, but August feeders still managed to reach new peaks.

Statistics:

  • The June live cattle contract rose by $1.65 to $87.32 at 10:23 CT (15:23 GMT).
  • Early trade was very active, with a significant number of trades being executed.
  • Major fund names such as Man Financial, Rosenthal, Refco, and RJ O'Brien participated in the buying, accounting for a substantial number of trades.
  • The rally in live cattle futures was driven by beef packers' expectations of battling for supplies next week.

Sources:

  • OsterDowJones
  • COMTEX (http://www.comtexnews.com)
  • Jim Cote, OsterDowJones, (312) 715-6284 jcote@osterdowjones.com