U.S. livestock: CME feeder cattle future tumble three-cent limit

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Thinly traded Chicago Mercantile Exchange feeder cattle futures closed down their three cents per pound maximum daily price limit Thursday on sell stops and deferred-month live cattle market selling, traders said.

The day’s corn price gains hastened CME feeder cattle losses.

Traders cited the exchange’s slipping feeder cattle index, which reflected lower prices for those animals in local markets.

January and March closed at 228.6 cents and 224.25 cents, respectively (all figures US$).

Live cattle end weaker

CME live cattle ended moderately lower after a choppy session in which the softer cash price outlook turned back sporadic short-covering, traders and analysts said.

December live cattle closed down 0.075 cent/lb. at 162.4 cents, and February off 0.275 cent at 162.575 cents.

On Thursday, market-ready (cash) cattle, sold in Texas at $164 per hundredweight (cwt) compared with roughly $173 two weeks ago, their most recent sales.

Cash cattle bids in Kansas stood at $162-$164/cwt versus up to $170 asking prices. Last week, cash cattle in Kansas and Nebraska sold at $167 to $168.

Unprofitable packer margins and tepid wholesale beef demand could pressure cash returns. And unexpectedly mild temperatures in the U.S. Midwest have allowed cattle to grow more quickly while increasing beef tonnage.

Thursday morning’s choice wholesale beef price shed $1.22/cwt from Wednesday to $248.73. Select rose 83 cents to $237.20, the U.S. Department of Agriculture said.

Active short-covering could develop on Friday before the weekend and as participants prepare for what for some will be extended year-end holiday vacations, a trader said.

Hogs close mostly weak

Most CME hog contracts closed down slightly following the morning’s wholesale pork price drop and in anticipation of downward-trending cash prices, traders said.

Early on Thursday, cash hogs in the Midwest traded mostly steady to down 50 cents/cwt, according to regional hog dealers.

USDA data showed the morning’s wholesale pork price sagged $2.11/cwt from Wednesday to $90.18, led by the $8.46 plunge in picnic shoulder cuts.

Fewer hogs are needed for slaughter as packing plants prepare to close over the Christmas and New Year’s holidays, traders and analysts said.

Processors lowered pork costs to compete with relatively expensive beef in the coming weeks, they said.

December closed up 0.275 cent/lb. to 87.55 cents, February off 0.2 cent at 84.35 cents and April 0.65 cent lower at 85.7 cents.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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