Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts posted modest losses on Thursday, pressured by continued fund selling, traders said.
They said, sporadic bargain hunting and solid wholesale beef demand freed contracts from session lows.
Additionally, investors at times sold the April contract and simultaneously bought June in a trading strategy known as bear spreading.
April live cattle ended down 0.425 cent/lb. to 131.75 cents, June closed up 0.025 cent to 121.75 cents, and August finished 0.3 cent lower at 117.4 cents (all figures US$).
The morning’s wholesale choice beef price was rose $1.81/cwt from Wednesday to $224.02. Select cuts climbed $2.43, to 214.96, the U.S. Department of Agriculture said.
Solid wholesale beef price and near-positive packer margins could support some prices for remaining market-ready, or cash, cattle by Friday, traders and analysts said.
They said other cash prices might feel pressure from significantly more cattle for sale than last week and this week’s almost two per cent drop in CME live cattle futures.
So far, a small number of cash cattle moved in Nebraska at $135 to $136/cwt, compared to mostly $136 there last week, said feedlot sources.
They said cash bids in Kansas and Texas were at $133 versus $136 to $138 asking prices. Last week’s overall cash sales ranged from $132 to $136.
CME feeder cattle closed firm, supported by futures’ discounts to the exchange’s feeder cattle index for April 13 at 157.01 cents.
April feeder cattle closed up 0.125 cent/lb., to 154.925 cents.
Weaker hog market settlement
Thursday morning’s wholesale beef price cash price pullback, and trepidation regarding CME lean hog contracts’ premiums to the exchange’s hog index for April 12 at 66.7 cents weighed on futures, traders said.
April, which expired at noon CDT (1700 GMT), closed up 0.275 cent/lb. to 66.8 cents, and nearly in line with the index.
Lightly-traded May ended 0.75 cent/lb. lower at 73.425 cents, and most active June finished 0.975 cent lower at 77.125.
Thursday morning’s wholesale pork price dropped 95 cents/cwt from Wednesday to $77.17, USDA said.
Grocers are buying pork for immediate needs given plentiful supplies, a traders said.
“I know there are a ton of hogs out there, but I think you’re going to see pork demand pick within a couple of weeks,” said JBS Trading president James Burns.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.