Futures on cattle closed with a significant loss on Wednesday amid expectations of increasing market supplies in the mid-term and disappointing macroeconomic data on the US.
By the end of CME trades June futures on cattle dropped by 1.6 cent (1.5%) down to USD 1.0215 per pound. August contract cheapened by 1.45 cent and equaled thus USD 1.0392 per pound. Futures on well-fed stock closed with a loss of 0.5 cent and constituted USD 1.2378 per pound.
On the other hand, concerns shifted towards supplies which are expected to become more voluminous in the mid-run. It pushed futures down to fresh 5-month lows on Wednesday.
Market participants note that farmers specializing on cattle took advantage of rising cash prices and provided the market with more products than it was predicted by economists.
In particular, beef market has been showing growth up to 12-month highs in terms of animal units. Supplies have been more and more voluminous due to seasonal factors as well. Thus, this week the amount of beef for sale rose by 3.5% as compared to last week.
Traders noted that the market may well be supported this week as the supermarkets have been indicating increased sales of meat for the holidays.
Market participants forecast that this week cash prices for beef will grow by USD 1-2 by 100 pounds hoping that next week sales will be more active. Yet on Wednesday in Texas and Kansas cash prices changed while sales grew in volume.
