051233 Cattle Outlook: Mixed Signals

Chicago - Chicago Mercantile Exchange live and feeder cattle futures contract opening price calls are mixed Thursday, with bullish traders pointing to technical chart strength, while bears are predicting a post-holiday decline in wholesale beef prices.

Overseas, Hong Kong said Thursday it has partially lifted a ban on U.S. beef imports that became effective two years ago. The government said in a statement that is was satisfied with the U.S. measures against mad cow disease.

Also, Japan's agricultural minister said Thursday consumers should make up their own minds about whether to eat beef from the U.S. now that a two-year-long ban has been lifted, Kyodo News Agency reported.

And, Japanese restaurant chain Yoshinoya D&C Co. (9861.TO) said Wednesday it has kept its fiscal year net loss outlook unchanged, as Japan's partial lifting of a two-year-old ban on U.S. beef imports will enable it to obtain only a limited supply for its popular beef-on-rice dishes.

LIVE CATTLE FUNDAMENTALS

The USDA's composite value for choice beef Wednesday was down $0.05 at $159.57 while select was down $0.82 at $144.59. The volume of sales for fabricated loads was about 266, while the load count for trimmings and coarse grinds was 146.

The choice versus select beef spread was $14.98.

The operating margin index for cattle packers was a minus $17.50 per head.

The latest CME feeder cattle cash index quote was up $0.15 at $115.91.

(Note: The operating margin index is not intended as an exact profit/loss statement for packers, but as an indication of the general health of the industry. The index was calculated by www.HedgersEdge.com.)

Source: Jim Cote, Dow Jones Newswires; 312-715-6284; jim.cote@dowjones.com

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