Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures on Thursday slid to a two-year low for a second consecutive session, after investors sold October and bought deferred months in anticipation of more cash price weakness, traders said.
Spot-October settled at 121.4 cents/lb., down 3.275 cents, and December 0.925 cent lower at 130 cents (all figures US$). CME live cattle on Friday will return to their normal three-cent daily price limit after failing to settle at the expanded 4.5-cent limit on Thursday.
This week, a small number of market-ready (cash) cattle in Kansas and Nebraska fetched $119-$124 and $118-$122/cwt, down from $128-$132 per cwt in the U.S. Plains a week ago, feedlot sources said.
Packers are trying to clear the backlog of heavyweight cattle that has recently depressed cash prices and increased beef tonnage at a time of seasonally slow demand.
Cattle futures fell because the cash market “is still like poison and cannot get a bid under it,” said Oak Investment Group president Joe Ocrant.
Investors are tracking Hurricane Joaquin that early next week might hurt meat demand and disrupt hog production on the U.S. East Coast.
Thursday morning’s wholesale choice beef price was at $209.19 per 100 lbs., up 57 cents from Wednesday. Select cuts slipped two cents to 204.18 cents/lb., the U.S. Department of Agriculture said.
CME live cattle losses dropped feeder cattle to a 1 1/2-year low for a second day in a row.
October ended at 177.4 cents/lb., down 0.775 cent.
Lower hog market settlement
Technical selling and unease ahead of a looming seasonal supply increase pressured CME lean hogs, traders said.
Spot-October, which will expire on Sept. 14, closed down 0.9 cent/lb. at 72.625 cents. December ended 2.2 cents lower, at 64.525.
October futures kept pace with CME’s hog index for Sept. 29 at 72.23 cents.
Talk that packers might cut cash bids soon given ample hog numbers, and after grocers buy all they need for National Pork Month, further pressured nearby lean hog contracts, a trader said.
USDA reported Thursday morning’s Iowa/Minnesota average cash hog price was at $71.41/cwt, down nine cents from Wednesday, but up six cents in the western Midwest at $71.01.
The government quoted the morning’s wholesale pork price at $86.35/cwt, $1.49 higher than on Wednesday, helped by a $4.41 jump in pork belly values.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.