Thu 17 Jan 2013 14:26:33 CT
February cattle managed to trade at the 300 point limit down level temporarily before closing down 192 points for the session. Weaker beef prices at mid-session and news of a plant closure in Texas helped to spark aggressive long liquidation selling from speculators. The plant has a capacity of near 4,600 head per day and may close on February 1st due to tightening supply in the region. Traders thought the 1971 plant slaughter pace had slowed recently due to water issues but fears that market-ready slaughter demand in Texas would decline was seen as one of the reasons for the selling. The market traded higher into the pit opening but selling emerged into the mid-session about when the plant closure news hit the wires. Throw-in-the-towel selling from speculators was the key to the sell-off. Talk of the short-term oversold condition of the market with RSI at 17 and ideas that fund traders who wanted to exit may already be out of the market may help to provide some support. Weekly U.S. beef export sales for the week ending January 10th came in a bit better than expected at 18,000 metric tonnes, compared with the prior 4-week average of 9,950 tonnes. Talk of colder weather for next week added to the positive tone. Boxed-beef cut-out values at mid-session were down $1.05 to $192.78 from $193.81 last week. Select beef was down 64 cents to $185.56, still up from $183.96 last week. Slaughter came in slightly below trade expectations at 124,000 head.
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