U.S. livestock: CME live cattle futures slump, but off session lows


Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed lower on Thursday, pressured by profit taking before the last trading day of the month on Friday, traders said.

Earlier, February and April triggered sell stops and fund liquidation after falling below the 10-day moving average of 152.95 cents and 151.05 cents, respectively (all figures US$).

CME live cattle ended off session lows in response to better-than-expected cash prices given recent futures losses, unprofitable packer margins and slack wholesale beef demand.

On Thursday morning, cash cattle in Texas and Kansas sold at $159 to $160 per hundredweight (cwt), steady to down $1 from last week, said feedlot sources.

They said packers in Nebraska paid up to $160.50/cwt for supplies, steady to up $1.50 from a week ago in the state.

The afternoon’s choice wholesale beef price sagged $2.70/cwt from Wednesday to $244.59. Select dropped $2, to $238.34, the USDA said.

Packers needed cattle after not buying enough of them last week with the belief that futures would be sharply lower again, said David Hales, author of the Hales Cattle Letter.

Beef demand on the North Atlantic states is expected to improve as the region recovers from a blizzard that dented meat sales.

Investors await USDA’s semi-annual cattle inventory report on Friday.

February closed 0.425 cent per pound weaker at 153.525 cents, and April one cent lower at 150.5 cents.

Profit-taking and CME live cattle futures losses pressured feeder cattle contracts.

January, which expired at noon CT, settled down 0.05 cent/lb. to 212.4 cents. March ended 0.775 cent lower, at 203.575 cents.

Hogs drop on pork prices

CME lean hogs closed sharply lower on profit-taking following lower wholesale pork prices, traders said.

February closed 2.975 cents/lb. lower at 68.55 cents, and April down 1.75 cents, to 73.2 cents.

USDA data showed the afternoon’s wholesale pork price had fallen $2.03/cwt from Wednesday, to $78.30.

Packers slashed wholesale pork prices to clear an inventory backlog caused by U.S. West Coast port congestion and a snow storm in the U.S. Northeast, an analyst said.

Some processors raised cash bids to carry hogs into early next week, he said.

Thursday afternoon’s average cash hog price in the western Midwest region was up 36 cents/cwt from Wednesday to $67.38, the USDA said.

Sells and technical selling hastened futures’ losses.

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

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