Chicago Mercantile Exchange live cattle settled down slightly, except for October futures, as investors awaited the U.S. Department of Agriculture’s monthly cattle-on-feed report at 2 p.m. CDT (1900 GMT), traders and analysts said.
Analysts polled by Reuters said U.S. feedlot cattle placements last month likely increased 1.2 percent from a year ago as less-costly corn encouraged feedlots to buy young cattle to fatten.
“The market is apprehensive before the cattle report,” said Domenic Varricchio, a broker with Schwieterman Inc.
USDA will simultaneously release its monthly cold storage report. The data will include September total beef and pork inventories.
Both reports will be released while CME livestock markets trade electronically after the pit sessions close.
The thinly-traded CME live cattle October contract, which expired from trading at noon CDT (1700 GMT), closed 1.150 cents higher at 134.500 cents per lb.
Prior to its expiration, October futures drew support from sentiment that cash cattle prices would trade at least steady with last week’s record high of $132 per hundredweight (cwt).
Cash cattle bids in Texas and Kansas stood at $130 per cwt, against asking prices of $134 and higher, said feedlot sources.
Bullish futures traders said the recent surge in wholesale beef values and improving, but still negative, margins would underpin cash prices.
Thursday morning’s wholesale choice beef price was $205.59 per cwt, down 9 cents from Wednesday. Select cuts were at $190.08, off a penny.
Bearish investors contend that still-negative margins could weigh in cash returns. There is also concern that grocers may resist buying beef at current price levels.
Funds that trade CME live cattle and hogs sold December futures and bought deferred months. They moved long positions further out prior to similar moves expected next week by followers of the Goldman Sachs Commodity Index (S&PGSCI).
Funds that follow the S&PGSCI will shift their December long positions mainly into February and April. That shifting will be for five days starting Nov. 7.
Live cattle December, the new lead month, finished
0.400 cent lower at 132.725 cents, and February closed at 134.200 cents, down 0.025 cent.
October feeder cattle futures, which also expired at noon CDT (1700 GMT), settled up 0.100 cent at 165.325 cents. The contract finished nearly in line with the exchange’s feeder cattle index at 165.24 cents.
Remaining feeder cattle contracts felt pressure from the weak live cattle market.
November feeder cattle, the new lead contract, closed 0.575 cent lower at 164.375 cents, and January ended at 163.675 cents, 1.125 cents lower.
Hogs down with cash
Lower cash hog and wholesale pork prices dropped CME hogs, traders said.
Thursday morning’s wholesale pork price was at $92.02 per cwt, down 61 cents from Wednesday, according to the USDA.
Separate government data Thursday morning showed the average cash hog price in the closely watched Iowa/Minnesota market at $83.71 per cwt, down 51 cents from Wednesday.
Traders sold December futures and bought deep deferred contracts with the view that the spread on U.S. hog farms of the Porcine Epidemic Diarrhea virus (PEDv), which is fatal to piglets, might reduce supplies in 2014.
December hogs ended 1.225 cents lower at 89.175 cents, and February closed 1.075 cents lower at 92.025 cents.