U.S. livestock: CME live cattle futures slide before USDA report

Chicago | Reuters — Chicago Mercantile Exchange live cattle ended lower on Friday, on profit-taking ahead of the U.S. Department of Agriculture’s cattle-on-feed report Friday afternoon, traders said.

USDA’s report is expected to show the number of cattle placed in feedlots in May declined from a year ago as high-priced calves deterred feedyards from buying them for fattening.

Investors pocketed profits after Thursday’s rally, which was led by stronger-than-expected prices for market-ready, or cash, cattle and in anticipation of beef prices peaking soon.

“There are ideas beef demand for July 4 could drop off quickly. At the same time, it looks like the cash trade is done for the week,” said Brock Associates analyst Doug Houghton.

This week, cash cattle in Texas and Kansas sold at $150 per hundredweight (cwt), $2 higher than last week (all figures US$). Cash cattle in Nebraska moved at $148 to $150, steady with a week ago.

Friday morning’s wholesale choice beef price was up 35 cents/cwt from Thursday at $240.81. Select cuts gained 19 cents to $233.28, the U.S. Department of Agriculture said.

On Monday, traders will digest Friday’s USDA cattle report while pondering cash sales as packers buy supplies for the July 4 holiday-shortened workweek.

June ended at 147.55 cents, down 0.45 cent. August closed 1.15 cents lower at 146.325 cents.

CME feeder cattle closed lower, pressured by the weak live cattle market and firm corn prices.

August finished 0.675 cent/lb. lower at 206.875, and September was down 0.4 at 208.175.

Hogs slip on pork prices

CME hogs posted modest losses, pressured by a wholesale pork price pullback in the morning that could hurt cash prices in the near-term, traders said.

USDA data showed Friday morning’s wholesale pork price at $126.66/cwt, down $1.44 from Thursday.

The morning’s average hog price in the western Midwest slumped by $4.03/cwt from Thursday to $116, according to USDA.

Packers may resist spending more for supplies if they are unable to sell the meat, a trader said. Grocers are expected to buy less product after having all they need to feature during the upcoming holiday, he said.

Profit-taking, fund selling and uncertainty in advance of next Friday’s USDA quarterly hog report dragged down deferred hog contracts, traders and analysts said.

July closed down 0.225 cent at 127.825, and August 0.6 cent lower at 129.15.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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