Chicago | Reuters — Live cattle futures on the Chicago Mercantile Exchange slid on Friday to end the week lower as cash markets stalled, despite strong slaughter rates.
“The weekly kill came in much larger than expected,” said Dennis Smith, commodity broker at Archer Financial. “I suspect that will change the tone of the cash steer market starting Monday morning.”
Cash cattle have traded in a range of $137-$140/cwt for more than a week, though Smith said strong slaughter rates and packer margins should incentivize more competitive cash rates (all figures US$).
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“We’re going to see this cash market wake up as they go after the cattle for the spring time demand,” said Smith.
Packers slaughtered 676,000 head of cattle for the week, 5.79 per cent more than the week earlier and 5.3 per cent more than the same period a year earlier.
The nearby April live cattle contract lost 0.75 cent to 137.825 cents/lb., while the most-active June contract eased 0.275 cents, to 133.825 cents/lb.
On a continuous basis, live cattle fell for a third consecutive week, losing 0.595 per cent.
May feeder cattle futures ended 0.1 cent lower at 159.375 cents/lb.
Boxed beef prices eased, with choice cuts trimming 93 cents, to $270.47/cwt, while select cuts lost 89 cents, to $260.33.
Meanwhile, CME lean hog futures were mixed, with nearby hogs slipping while most-active June futures firmed.
“The hogs are a tough one. We had a bullish hog and pigs report (last week), and it’s been nothing but down since,” said Smith.
CME nearby April lean hogs eased 0.025 cent, to 99.025 cents/lb., while the benchmark June contract added 0.425 cent to 114.575 cents/lb.
On a continuous basis lean hogs lost 2.246 per cent for the week.
Hog processors slaughtered 2.43 million head for the week, 4,000 below the week prior and 0.98 per cent lower from a year earlier.
The CME lean hog index, a two-day weighted average of cash hog prices, fell 0.4 cents, to 100.68 cents/lb.
— Reporting for Reuters by Christopher Walljasper in Chicago.
