U.S. live cattle futures slump in fund selloff

Chicago Mercantile Exchange live cattle slumped on Monday, pressured by fund liquidation and lower corn prices, analysts and traders said.

Cheaper corn could prompt livestock producers to feed more cattle and hogs and to heavier weights.

CME live cattle June finished below the 40-day moving average of 121.023 cents, triggering fund selling. It closed at 120.725 cents, or 0.575 cent per pound lower (all figures US$).

August earlier slipped below the 20-day moving average at 119.906 cents. It finished 0.975 cent lower at 119.475 cents.

Traders wait for feedlots to count this week’s available supplies. Investors also eye wholesale beef demand.

Government data quoted wholesale price of choice beef, or cutout, on Monday morning at $207.10 per hundredweight (cwt), up 45 cents from Friday; select cuts slipped 55 cents to $186.65.

U.S. beef buying typically lags after the May 27 U.S. Memorial Day holiday. Grocers are not expected to again ramp up meat purchases until a few weeks before the U.S. July 4 holiday.

Packers may need cattle after not actively buying supplies in recent weeks. Cattle supply, however, is already rising seasonally, potentially discouraging packers from spending more than they have to for cattle.

Cash-basis cattle last week fetched $124 to $125/cwt, roughly steady with the week before.

“The market is busy trying to dial in the cash market bottoming out somewhere between $116 and $120/cwt and the cutout dropping below $200/cwt,” said U.S. Commodities analyst Don Roose.

Higher cash feeder cattle prices at the most-watched Oklahoma City market underpinned August feeder cattle futures.

The lower live cattle market pressured CME September feeder cattle.

August feeder cattle closed at 144.425 cents, up 0.1 cent/lb. September settled at 146.5 cents, down 0.075 cent.

Most hogs sag on spreads

Higher cash hog prices fueled bullish spreads that underpinned the June contract while pressuring other months, traders and analysts said.

Packers need hogs because of tight supplies, a trader said. That could change late Monday or on Tuesday because of their unprofitable margins, he said.

And Monday morning’s pork cutout rebound motivated June futures buyers, analysts and traders said.

The average hog price on Monday afternoon in the most-watched Iowa/Minnesota market was $95.26/cwt, $2.74 higher than on Friday.

The U.S. Department of Agriculture’s Monday morning mandatory wholesale pork price, calculated on a plant-delivered basis, was $94/cwt, which was up 49 cents.

CME June hogs settled up 0.2 cent, to 95.825 cents/lb.

Investors dumped deferred-month long positions as corn prices drifted lower.

July closed at 93.55 cents, or down 0.3 cent, and August finished 0.675 cent lower at 92.8 cents.

— Theopolis Waters reports for Reuters from Chicago.

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