U.S. livestock: CME live cattle close mostly weak before USDA report

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts settled lower on Friday, after investors tweaked positions ahead of the afternoon’s U.S. Department of Agriculture’s monthly Cattle on Feed report at 2 p.m. CT, traders said.

February closed up 0.225 cent/lb. to 135.375 cents, April ended 0.425 cent lower at 133.95 cents and June down 0.3 cent to 123.15 (all figures US$).

Traders said some market participants sold deferred CME live cattle months and bought February in anticipation of at least steady prices for market-ready, or cash, cattle later on Friday.

Cash bids in Texas and Kansas held at $131/cwt against $136 asking prices, said feedlot sources. Last week, most cash cattle brought $134.

Fewer cattle for sale, this week’s four per cent bump in futures prices and expectations of a turnaround soon in wholesale beef values may support cash prices, said traders and analysts.

They said some processors will maintain reduced kill levels to limit cash spending, grow their margins and shore up sagging beef cutout values.

USDA data showed the morning’s wholesale choice beef price slumped $1.13/cwt from Thursday, to $212.26. Select cuts fell 73 cents, to 208.54.

Friday’s average beef packer margin was a negative $23.60 per head, up from a negative $39.20 on Thursday, as calculated by HedgersEdge.com.

Weak back-month live cattle futures weighed on CME’s feeder cattle market. March closed 0.6 cent/lb. lower at 155.875.

Lower lean hogs close

Soft wholesale pork values and mixed, rather than higher, cash prices sent CME lean hog lower, traders said.

They said fund selling and future’s premiums to the exchange’s hog index for Feb. 17 at 66.26 cents contributed to futures’ losses.

April closed 1.875 cents/lb. lower at 68.9 cents, and May finished down 1.5 cents, to 75.25 cents.

Friday morning’s average cash hog price in Iowa/Minnesota was down 25 cents from Thursday in light volume to $64.23, but rose 42 cents in the western corn belt to $63.83, USDA said.

The morning wholesale pork price on Friday had fallen $1.01/cwt from Thursday to $74.47, USDA said.

Some processors bought enough hogs into the weekend, while others “are trying to fill a few holes for next week,” a Midwest hog dealer said.

He said grocers look to purchase pork cheaper due to currently abundant hog supplies.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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