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Uncertainty Weighs on CME Live Cattle Futures
USAgNet - 08/09/2017

Chicago Mercantile Exchange live cattle futures were weakened on Tuesday by uncertainty over how much packers will pay for cattle this week and whether the seasonal lull in wholesale beef demand has ended, traders said. Futures remained at a steep discount, or undervalued, compared with this week's expected prices for market-ready or cash cattle, which minimized market losses.

According to Reuters, August ended down 0.275 cent per pound at 112.475 cents, and October closed 0.525 cent lower at 110.600 cents.

Demand for beef remains low, the outlook for U.S. beef exports to China is still a mystery and cattle supplies are plentiful, Oak Investment Group President Joe Ocrant said, citing the bearish market for live cattle futures.

Market bears believe tepid beef demand and increased cattle numbers ahead might discourage packers from bidding up for supplies this week.

Bullish traders said easing but still-profitable packer margins and currently tight cattle supplies in parts of the U.S. Plains might mitigate potential cash cattle price losses.

A week ago packers paid $116 to $119 per cwt for slaughter-ready cattle.

Investors await Wednesday's Fed Cattle Exchange sale for cash price direction. A week ago, animals moved at $116 per cwt.

Sell stops and softer live cattle futures pressured CME feeder cattle for a third straight session.

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