Chicago | Reuters — U.S. cattle futures fell more than one per cent on Thursday, extending losses to the second straight session on a technical sell-off as wholesale beef prices also continued to lose ground, traders and analysts said.
Lean hogs were mixed at the Chicago Mercantile Exchange, with some front-month hog futures contracts rising slightly amid gains in Midwest cash hog markets.
CME February live cattle futures finished 1.65 cents lower at 117.475 cents/lb., easing against deferred contracts as investors rolled out of front-month positions into April and June cattle futures (all figures US$).
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Most-active CME March feeder cattle futures fell 1.875 cents to 127.75 cents/lb., dropping from Wednesday’s more than five-month high.
“The beef market has collapsed and it’s pressuring the cattle futures,” said Brock Associates analyst Doug Houghton. “The (cattle) cash outlook is still firm, and cattle supplies are looking pretty tight.”
Cattle traders were waiting for deals to develop in U.S. Plains cash steer and heifer markets, following firm sales on Wednesday at the online Fed Cattle Exchange auction of about $119/cwt, up from mostly $117 the previous week.
Seasonally slow demand for high-priced meat cuts such as steaks and chops has pressured wholesale beef prices. The U.S. Department of Agriculture after the close of futures trading said choice-grade beef was down 29 cents, to $189.10/cwt, lowest in about five weeks.
USDA said wholesale pork was down $1.31, to $79.37/cwt.
CME February lean hogs gained 0.35 cent to settle at 65.95 cents/lb., still below the roughly six-month high of 66.9 reached on Jan. 3. CME April hogs were up 0.05 cent to 69.55 cents.
Pork packers have bought hogs aggressively to capitalize on profitable margins, underpinning cash hog and futures prices. USDA said hogs fetched an average price of $62.78/cwt, up $1.36, in the key market of Iowa and southern Minnesota.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.
