Chicago/Reuters – Chicago Mercantile Exchange live cattle futures settled down by their 3-cents per lb daily price limit on Wednesday, in anticipation of weaker prices for market-ready, or cash cattle, traders said.
Spot December and February finished at 137.225 and 139.650 cents per lb, respectively. Live cattle’s trading limit will be expanded to 4.5 cents on Thursday.
“As far as the limit down, it’s longs who wanted out because the market was going down,” said Oak Investment Group president Joe Ocrant.
Processors may limit cash spending later this week to recapture lost profits and generate wholesale demand for beef as grocers prepare to promote ham and turkey for the Thanksgiving holiday, said traders and analysts.
They said at least one packing plant is expected to be closed on Thursday or Friday for maintenance, which will reduce their need for supplies.
Feedyards in Kansas and Texas priced cash cattle up to $142 per cwt with no bids from packers, said feedlot sources. Last week, cash cattle in the U.S. Plains moved at $133 to $138.50.
Wednesday morning’s wholesale choice beef price jumped $2.18 per cwt from Tuesday to $220.58. Select cuts rose 57 cents to $210.89, the U.S. Department of Agriculture said.
CME live cattle losses mounted after December and February fell below their respective 40-day moving averages of 138.65 and 140.10 cents.
Technical selling and CME live cattle’s limit-down session sank feeder cattle futures by their 4.500-cents per lb limit, with spot-November closing at 186.150 cents.
Feeder cattle limits will be expanded to 6.750 cents on Thursday.
Lower hog futures settlement
CME lean hogs closed lower, with most trading months marking fresh contract lows, as cash prices continued their downward trend, traders said.
Spot December closed 0.850 cent per lb lower at 57.375 cents. February ended 1.050 cents lower at 60.025, after posting a contract low of 59.900 cents.
Cash hog prices in Midwest on Wednesday morning were as much as $3 per cwt lower as hog supplies expand seasonally as post-October Pork Month demand subsides, regional hog dealers said.
From Monday to Wednesday, packers processed 1.303 million hogs, up 11,000 from the same period last week, based on USDA estimates.
Separate government data showed the morning’s wholesale pork price fell $1.03 per cwt from Tuesday to $76.54, with pork bellies losing more than $8 in value.