Chicago | Reuters –– Most Chicago Mercantile Exchange live cattle contracts ended moderately lower on Tuesday, with October helped by the upturn in wholesale beef prices and anticipation of higher cash prices later in the week, traders said.
But, they said, profit-taking and uneasiness about cattle supplies in the coming months pressured remaining CME live cattle contracts.
Spot October finished 0.5 cent/lb. higher, at 132.425 cents, December down 0.375 cent, to 137.2, and February 0.275 cent lower, at 139.475 cents (all figures US$).
The market lacked direction after already pricing in possibly higher cash and wholesale beef values this week, said Troy Vetterkind, president of Vetterkind Cattle Brokerage.
Tuesday morning’s wholesale choice beef price, or cutout, rose $2.63/cwt from Monday, to $207.93. Select cuts surged $4.16, to $203.28, the U.S. Department of Agriculture said.
The recent beef cutout upswing may again encourage packers to spend more for cattle, which trimmed their margins, a trader said.
Last week, the bulk of market-ready, or cash, cattle in the U.S. Plains moved at $126-$127/cwt, up from $118-$124 the week before.
The average beef packer margin for Tuesday was $63.35 per head, down from $117.15 on Monday, as calculated by consultancy HedgersEdge.com.
Sharply higher cash feeder cattle prices underpinned CME’s October feeder cattle contract, while deferred months felt pressure from firm corn futures and back-month live cattle market weakness.
October ended 0.325 cent/lb. higher at 189.7 cents, November unchanged at 186.6 and January closed down 0.075 cent to 181.
Higher hog futures settlement
CME lean hogs ended higher as the October contract kept pace with the exchange’s hog index for Oct. 9 at 74.77 cents, traders said.
They said deferred trading months’ sizeable discounts to the hog index attracted speculative buyers.
Spot October, which will expire on Wednesday, settled 0.55 cent/lb. higher at 74.85 cents, and December finished 1.075 cents higher at 67.575.
Conflicting market fundamentals limited futures’ gains.
USDA quoted the morning’s wholesale pork price at $88.30/cwt, $1.17 lower than on Monday.
The government reported Tuesday morning’s average cash hog price in the western Midwest market at $71.64/cwt, 98 cents higher than on Monday.
Some packers need hogs for the rest of this week’s production, while grocers purchase less pork heading into the second half of October Pork Month, a trader said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.