Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed lower on Monday, pressured by weak wholesale beef values and profit-taking on the final trading session of the month, traders said.
Spot-August futures, which expired at noon CT, settled 1.025 cents/lb. lower at 145.5 cents (all figures US$). October, the new lead month, ended down 0.775 cents at 143.2 cents.
The morning’s wholesale choice beef price fell 80 cents, to $242.42/cwt, from Friday. Select cuts shed 40 cents, to $232.55, the U.S. Department of Agriculture said.
Other than a few stores conducting fill-in business, most supermarkets bought all the product they need to advertise for Labour Day, the last grilling holiday of the summer, a trader said.
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Meanwhile, packing plants will be closed for at least on day over the three day holiday, reducing their demand for market-ready, or cash, cattle.
Last week, cash cattle traded at $144-$147/cwt, down from $147-$149 a week earlier, feedlot sources said.
October futures are underpriced based on last week’s cash prices, which might be viewed as a bullish market factor on Tuesday, traders and analysts said.
Still, they said, some investors may be nervous about heavier cattle in feedyards that suggest increased supplies in the near term.
Live cattle futures losses dragged down CME feeder cattle contracts, with September closing 0.575 cent lower at 201.825 cents.
Hog futures end higher
CME lean hogs garnered support from short-covering, technical buying and higher wholesale pork values, traders said.
Spot-October closed 1.6 cents/lb. higher at 68.025 cents, and December up 1.575 cents at 63.625 cents.
Monday morning’s wholesale pork price, or cutout, was at $86.38/cwt, a $1.85 jump from Friday, driven by higher pork bellies and picnic shoulder cuts, according to USDA data.
The morning’s cutout upswing might reflect last-minute shopping by supermarkets ahead of the upcoming holiday, traders said.
Futures’ discounts to CME’s hog index for Aug. 27 at 78.28 cents furthered advances.
“The cash market has not fallen enough to justify these discounts,” said Allendale Inc chief strategist Rich Nelson.
USDA reported the morning’s Iowa/Minnesota average cash hog price at $71.88/cwt, down 24 cents from Friday.
Despite seasonal growth forecasts, Nelson cited a tendency for October futures to rally in September as retailers buy more pork in perpetration for National Pork Month in October.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
