Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed lower on Thursday, pressured by profit-taking as early-week cash price optimism waned, traders said.
April closed 0.85 cent/lb. lower at 135.45 cents, and June ended down 0.3 cent, to 125.625 (all figures US$).
Packers are dug in with market-ready, or cash, cattle bids in Texas and Nebraska at $136/cwt, with sellers stubbornly asking $140-$142, said feedlot sources.
Last week, cattle in the U.S. Plains moved at $133-$137.
On Tuesday, investors thought packers would pay steady-to-better money than last week for supplies after bidding for them earlier in the week than usual.
Futures’ recent rally, tighter cattle numbers ahead, and increased beef demand for spring cookouts after Easter fed into initial bullish cash price expectations.
Since then, futures have retreated, wholesale beef prices stumbled and processors are showing little interest in buying cattle before Friday.
The morning’s wholesale choice beef price dropped 28 cents/cwt from Wednesday, to $219.77. Select cuts fell 76 cents, to $211.17, the U.S. Department of Agriculture said.
“Without any positive news, right now nobody wants to be a hero,” a trader said.
Front-month live cattle market selling dragged CME feeder cattle contracts lower. March closed down 0.7 cent/lb. to 157.6 cents.
Uneven hog futures settlement
Technical buying propped up CME’s April lean hog contract, but soft cash hog and wholesale pork values weighed on other trading months, said traders.
April closed up 0.3 cent/lb. to 70.35 cents, and above the 10-day moving average of 70.24 cents. May ended down 0.125 cent, to 76.775 cents, and June closed unchanged at 80.7 cents.
Thursday morning’s average cash hog price in the western Midwest shed 76 cents/cwt from Wednesday in light volume, to $62.85, USDA said.
The morning wholesale pork price on Thursday declined 33 cents/cwt from Wednesday, to $75.43, based on government data.
Market participants are wary of the government’s morning direct cash hog price data because it has less packer involvement than the afternoon reports, a trader said.
He said product sales tend to struggle this time of year after end users concluded the bulk of their ham purchases for the Easter holiday on March 27.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.