A quick glance on cattle markets
CME live cattle closed higher on fund buying, short covering and buy stops.
Live cattle began the session flat to weaker on residual selling and futures' premiums to last week's fed-cattle sales.
However, August was able to hold above its 10-day moving average with the help of late Tuesday's boxed beef price gains. What's more, profitable beef packer margins stirred confidence about this week's cash cattle price prospects.
Fed-cattle bids surfaced at $81 per hundredweight on a cash-basis against asking prices upwards of $85. Cash cattle last week sold for $82 to $82.50 versus mostly $81 with a few head at $82 the previous week.
The latest operating margin index for beef packers was plus $51.55 per head, compared with plus $49.90 the previous day, as calculated by HedgersEdge.com.
August gathered upward momentum after it overcame 20- and 40-day moving average convergence resistance. And October, with the help of spreaders, cracked the 100-day, and later 10-day, moving average resistance.
Flat CBOT corn offered nothing for back-contract cattle bulls to sink their teeth into. However, far cattle month longs savored the dollar's weakness and firmness in outside markets.
Bullish and bearish traders wonder if Tuesday's rally will stand Wednesday and heading into Friday's monthly USDA cattle-on-feed report.
Some also believe the bulk of cash cattle may not change hands until after the data's release on Friday, which could prompt futures buyers to exercise caution beforehand.
Market participants will watch late Tuesday data for possible deliveries with the August contract set to expire on Aug. 31.
Feeder cattle ended higher on short covering, a rally in live cattle and buy stops. Front-month feeder cattle traded nearly in line with CME's feeder cattle index which generated buying interest.
August and September buying occurred after both options rolled through key chart resistance barriers.
And, spreaders bought back months and sold August.
August live cattle closed 65 points higher at 84.95 cents a pound, and October finished 102 points higher at 88.85 cents.
August feeder cattle, which will expire on Aug. 27, ended up 47 points at 101.15 cents, and September closed up 85 points at 101.25 cents.
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