Markets slide for cattle producers
Chicago Mercantile Exchange pit-traded live cattle and feeder futures prices Wednesday ended lower amid widespread long liquidation.
After cattle futures pushed higher on Tuesday and filled a chart gap in the February contract, traders Wednesday got back to market fundamentals, which means looking at cash prices that were lower this week, brokers said.
Cash cattle traded Wednesday in the Plains at $83 to $84 per hundredweight on a live basis versus $83 to $85 last week. On a dressed basis cattle sold this week at mostly $130, compared with $132 to $134 a week ago.
Managed commodity funds, which were buyers on Tuesday, turned into sellers on Wednesday, brokers said. Fund buying may return later, and some expect a normal month-end fund buying to show up before the Thanksgiving Day holiday.
Some liquidation was linked to fears that expanded delivery points inject a certain amount of uncertainty about where cattle will be delivered, if they are delivered, and some traders wanted to avoid the possibility of deliveries that were out of convenient position for them.
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