Chicago / Reuters – Chicago Mercantile Exchange live cattle ended lower on Friday, pressured by lower cash cattle prices and weaker overall commodities market, traders said.
“The morning beef prices were not good, but commodities in general had a rough day and cattle aren’t immune to those changes,” said Dominic Varricchio, commodities broker at Schwieterman, Inc.
CME live cattle futures touched a record high of 171.975 cents per lb before closing down 1.000 cents at 169.500 cents per lb.
The CME October contract expired at Noon CDT on Friday, making December the new front-month contract.
Some market participants were surprised by cash cattle trading in Kansas at $168 per cwt, down $2 from last week’s record high of $170 per cwt.
“That was unusual to come down after last week’s high. Some thought it might go as high as $172,” said Lane Broadbent of KIS Futures.
Instead of paying higher prices, beef packers, who were concerned about profit margins and wholesale beef prices, pulled back on spending in the cash market which weighed on live cattle futures.
Friday morning’s choice wholesale beef price fell $1.58 per cwt from Thursday to $251.77. Select cuts slipped 24 cents to $239.17, the U.S. Department of Agriculture said.
CME feeder cattle followed the live cattle market lower. November feeder cattle, the new lead month, ended 0.075 cents lower at 234.150 cents per lb.
Hogs edge higher
CME lean hogs closed higher on Friday supported by short-covering, while soft cash hog prices and a slightly lower wholesale pork prices on Friday morning limited futures’ gains, traders said.
Short-covering and investors searching for a market bottom might lend support to hog futures on Friday, the last trading day of the week and the month of October, a trader said.
Inexpensive feed combined with cooler weather have allowed hogs to add weight quickly. Meanwhile an ample supply heavier weight hogs has increased the availability of pork products, pressuring wholesale prices.
USDA data showed the morning’s wholesale pork price down 91 cents per cwt from Thursday to $96.93, weighed on by the $4.17 drop in loin values.
December ended 0.825 cent per lb higher at 88.025 cents, and February was 1.100 cents higher at 88.050.