U.S. livestock: Cash price pessimism drops CME live cattle to 13-month low

Chicago / Reuters – Chicago Mercantile Exchange live cattle fell to their lowest level in 13 months on Tuesday in anticipation of lower prices this week for market-ready, or cash, cattle, traders said.

August closed 1.600 cents per lb lower at 145.150 cents, and October down 1.750 cents at 147.275 cents.

On Tuesday, isolated cash bids cropped up in Kansas at $144 per cwt versus $150 asking prices, feedlot sources said. Last week, cash cattle in the U.S. Plains fetched $148.

Packer margins have been worn down by seasonally slack beef demand as sultry summer weather tempers barbecuing activity and curbs consumer appetite for heavier meals.

Beef demand could turn around in two to three weeks as retailers consider buying product for the Labor Day holiday in early September, Livestock Marketing Information Center economist Jessica Sampson said.

Tuesday morning’s wholesale choice beef price was at $234.10 per cwt, up 27 cents from on Monday. Select cuts slipped 5 cents to $230.17, the U.S. Department of Agriculture said.

The USDA will issue the monthly cold storage report on Wednesday at 2 p.m. CDT (1900 GMT). It will include June beef and pork inventories.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 454.2 mln lbs, and pork stocks at 606.2 mln lbs.

CME feeder cattle stumbled on profit-taking, technical selling and lower cash feeder cattle prices.

August closed 3.250 cents per lb lower at 213.075 cents.

August hog futures up, others down

CME lean hogs finished mostly lower after investors sold deferred months and bought the August contract stirred by the jump in wholesale pork values, traders said.

August ended 0.975 cent per lb higher at 75.875 cents, October down 0.550 cent at 62.400 cents and December 0.750 cent lower at 59.750 cents.

Government data showed the morning’s wholesale pork price at $85.43 per cwt, up $2.46 fueled by $4.73 higher costs for loins.

Retailers are featuring pork and chicken as a cheaper alternative to record-high beef prices, a trader said.

Plentiful supplies kept a lid on cash prices that, coupled with strong pork cutout values, enhanced packer profit margins.

USDA reported Tuesday morning’s average cash hog price in Iowa/Minnesota down 57 cents per cwt from Monday at $74.50.

Tuesday’s pork packer margins were a positive $9.50 per head, compared with a positive of $7.45 on Monday and a positive $2.05 a week ago, according to Colorado-based analytics firm Hedgersedge.com.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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