FX.co ★ Cattle review for June 9, 2011

Futures on cattle grew on Thursday amid expectations of sharp decrease in corn reserves.
By the end of CME trades August futures on cattle gained 0.875 cent (0.8%) and constituted USD 1.05425 per pound. Futures on well-fed live stock due for supplies in August got more expensive by 0.522 cent and equaled thus USD 1.25325 per pound.
The market was supported by the US Agriculture Department report on grain reserves. The government lowered its forecast on corn harvest and world reserves by 13%. The reported data confirmed that corn reserves have been on unprecedently low levels and intensified concerns of market participants regarding further reduction of reserves next year.
High prices for corn may bring about farmers decreasing cattle in number aiming to cut expenses on feeding.
Cash prices also pushed futures slightly down: they have been rising for the second day in a row.
In Texas 20000 cattle units were sold, while in Kansas as many as 28000 units were sold. This week cash prices have amounted to USD 1.05-1.06 per pound which is 2 cent as higher as it was last week.
In Nebraska sales are 50000 cattle units with cash prices having gained 1-2 cent.
Yet wholesale prices have been declining for the fifth day straight. Falling from many-year highs hit in April is already equal to 10%. Thus, on Thursday cash prices dropped by USD 1.26 down to USD 174.15 per 100 pounds.