Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts slumped on Friday, pressured by triple-digit Wall Street losses and a firmer U.S. dollar, traders said.
U.S. stocks fell on Friday, with the tech sector weighing the most after a chip maker warned of a major pullback in the industry.
Continued broader market liquidation and the strengthening dollar could dent U.S. exports, traders and analysts said.
Encouraged by higher slaughter cattle prices, some investors simultaneously bought October futures and sold back months in a trading strategy known as bull spreads.
On Friday, market-ready or cash cattle in Nebraska moved at $164 to $165 per hundredweight (cwt), up $2 to $3 from last week, according to feedlot sources (all figures US$).
Late on Thursday, packers in Kansas paid $164 for cattle, $2 higher than last week, they said.
Grocers may push back against expensive beef after packers raised prices to improve their margins and offset rising cattle costs.
Friday afternoon’s choice wholesale beef price rose 61 cents/cwt from Thursday to $247.67. Select was down 11 cents to $234.74, USDA said.
“Losses the past couple of days will test the perception that CME live cattle is a bull market,” a trader said.
October closed 0.9 cent higher at 164.9 cents. December ended down 0.575 cent to 165.3, and February ended 1.4 cents lower at 165 cents.
CME feeder cattle futures fell hard on profit-taking, fund selling and sagging deferred live cattle contracts.
October closed 1.15 cents per pound lower at 240.5 cents, and November 2.325 cents lower at 239.2 cents.
Hogs close lower
CME lean hogs felt spillover pressure from fund liquidation and selling in the neighbouring live cattle market, traders said.
Market bulls remain nervous about cash hog and wholesale pork prices as supermarkets wrap up October Pork Month business while focusing on winter holiday ham demand, an analyst said.
While some packers could use a few hogs for early next week, others may bid lower for livestock as supplies grow seasonally, traders and cash hog dealers said.
USDA data showed Friday afternoon’s average hog price in Iowa/Minnesota up 61 cents/cwt from Thursday to $107.33.
Separate government data quoted the afternoon wholesale pork price down 82 cents/cwt from Thursday to $122.63.
USDA on Friday upped its pork production forecast for the calendar year ending September 2015 that shows pork surpassing beef for the first time since 1952. [Related story]
October hogs settled down 0.05 cent/lb. to 109.45 cents, and December 1.225 cents lower at 94.4 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.