Chicago | Reuters — Chicago Mercantile Exchange cattle futures fell on Friday, as cash cattle prices eased and packers continued to hemorrhage profits and remained reluctant to pay more for animals, analysts and traders said.
Meanwhile, lean hog futures firmed as profit margins improved for pork processors.
Limited cattle supplies kept a floor under the market during the trading session, as drought has reduced the amount of pasture available for grazing and producers have sent more cattle to slaughter.
“Now, you’re seeing a complete stalemate in the cash market for cattle, as packers are still in the red and have been in the red for a while,” said Jason Roose, commodities analyst with U.S. Commodities in West Des Moines, Iowa.
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U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
Cattle daily slaughter numbers were 109,000 on Friday, down from a week ago and the same time a year earlier, according to data from the U.S. Department of Agriculture.
Meatpackers were losing $77.85 for each head of cattle they processed on Friday, compared with a loss of $56.98 a week ago, according to HedgersEdge.com (all figures US$).
But pork processors’ profit margin was $23.05 per hog, up from a profit of $18.51 a week earlier — even as pork belly cut-out prices ticked down on Friday, according to U.S. Department of Agriculture data.
CME August live cattle futures ended 0.725 cent lower, to settle at 180.375 cents/lb. Most-active October live cattle fell 1.2 cents, to 181.325 cents/lb.
September feeder cattle futures eased 0.125 cent to 251.45 cents/lb.
In the lean hog market, the nearby August contract gained 0.375 cent to settle at 102.1 cents/lb. The most-active October contract rose one cent to 81.325 cents per pound.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.
