Chicago | Reuters — Chicago Mercantile Exchange live cattle futures eased for a third session on Friday as futures markets tried to read conflicting cash markets, traders said.
“We have the (U.S.) south backed up on cattle, trying to get cattle moved through,” said Scott Varilek, broker at Kooima Kooima Varilek Trading Inc. “There’s tighter supplies up here, because the incentive to feed cattle in the north has not been here for a while.”
Backed-up supply in the south has led to lower cash prices, with Texas and Oklahoma trading cash cattle around $120/cwt, while producers holding smaller supplies in Nebraska saw $125 trade, according to the U.S. Department of Agriculture (all figures US$).
Boxed beef prices continued to ease, though still high, with choice cuts falling $3.38, to $278.59/cwt, USDA said, while select cuts dropped $2.65, to $257.41/cwt.
“There’s still plenty of meat on the bone, as far as where our prices are at and what boxed beef is worth,” said Varilek.
CME August live cattle futures ended down 0.05 cent at 119.225 cents/lb., ending the week 2.775 cents lower, a 2.27 per cent drop for the week, its biggest weekly loss since the week ended April 16.
Feeder cattle benefited from a 12 per cent weekly drop in corn futures, with CME August feeder cattle adding 1.85 cents to end at 159.175 cents/lb., ending the week 2.125 cents higher, a 1.35 per cent gain.
CME lean hogs gained as supplies of market-ready hogs struggle to rebuild.
“The numbers just aren’t there. We haven’t been able to replenish that shortage yet,” said Varilek.
Processors slaughtered 1.87 million hogs week-to-date, down 19.37 per cent compared with the same period last year.
CME lean hog futures for August delivery gained 1.2 cents to 101.575 cents/lb., adding 1.35 cents for the week, a 1.3 per cent weekly gain.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.