U.S. livestock: CME live cattle futures losses mount; hogs rally

Chicago/Reuters – Chicago Mercantile Exchange live cattle futures closed lower for a fourth straight session on Monday, led by initial technical selling and a retreat in wholesale beef values, said traders.

Most actively traded December live cattle closed 1.075 cents per pound lower at 101.650 cents, and settled nearly par with the 40-day moving average of 103.64 cents.

Monday morning’s choice wholesale beef price had fallen $1.07 per cwt from Friday to $187.63. Select cuts sagged 56 cents to $172.47, the U.S. Department of Agriculture said.

The wholesale beef market may be close to topping out at a time of year when it tends to weaken heading into the Thanksgiving, Christmas and New Year’s holidays, said Brock Associates Inc analyst Doug Houghton.

Despite still healthy packer profits, investors may be eyeing softer cash returns by the end of the week based on futures’ pullback and Monday morning’s lower wholesale beef price.

Last week, packers paid $102 to $105 per cwt in the U.S. Plains for slaughter-ready, or cash, cattle that a week ago brought $104 and $105.

Market participants will monitor Wednesday’s sales at the Fed Cattle Exchange where a small volume of animals last week fetched as much as $106. November feeders finished down 1.550 cent per lb to 124.075 cents, pressured by technical selling and more live cattle futures losses.

Hogs turn higher

Buy stops and short-covering after recent market declines lifted CME lean hogs, said traders.

They said the morning’s wholesale pork price turnaround and futures’ discounts to CME’s hog index for Nov. 3 at 51.09 cents attracted buyers.

December lean hogs closed 0.950 cents per lb higher at 47.100 cents, and February 1.000 cent higher at 53.975 cents.

The morning wholesale pork price, or cutout, on Monday jumped $1.31 per cwt from Friday to $74.65, spurred by an almost $4 price hike for picnic shoulder cuts, the USDA said.

It is impressive that cutout values have remained fairly stable despite huge hog production hovering around 2.5 million head per week, said Houghton.

He said if those elevated slaughter rates persist into early December, pork demand could face challenges when most grocers have wrapped up their holiday meat purchases.

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