U.S. livestock: CME live cattle hit new contract lows before report

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures sped to new contract lows, accelerated by bearish fundamentals and positioning before the government’s monthly Cattle on Feed report at 2 p.m. CT, traders said.

Simultaneously, the U.S. Department of Agriculture will issue its monthly cold storage data that will include total March beef and pork inventories.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 491.4 million lbs., and pork at 613.4 million lbs.

So far this week, packers paid $125-$128/cwt for a small number of market-ready, or cash, cattle compared with $133-$136 last week, said feedlot sources (all figures US$).

The morning’s wholesale choice beef price slipped 22 cents/cwt from Thursday to $220.50. Select cuts fell $1.21, to $211.56, the USDA said.

Some packers bought enough cattle ahead for early-May delivery, which allowed them to pay less for animals this week, a trader said.

He said sharply lower corn prices may have spooked CME live cattle futures traders into thinking that cheaper feed might encourage ranchers to fatten cattle to heavier weights, dumping more product into the wholesale sector.

April live cattle closed 1.775 cents/lb. lower at 124.725 cents. June ended down 2.25 cents/lb. to 114.65 cents, and made a new contract low of 113.9 cents.

Sell stops and heavy live cattle futures’ losses pressed several CME feeder cattle contracts to new lows.

“The continued erosion in August and September feeder cattle futures partly reflects the softness in the cash cattle market,” said Livestock Marketing Information Center director Jim Robb.

April feeder cattle closed 1.5 cents/lb. lower at 147.95 cents. May ended three cents lower at 142.45 cents, and posted a fresh low of 141.05 cents.

Lower hog market settlement

Profit-taking and the morning’s wholesale pork price retreat weighed on CME lean hogs, traders said.

Thinly traded May ended 1.325 cents/lb. lower at 75.7 cents, and most-active June finished down 0.7 cent to 78.825 cents.

Friday morning’s wholesale pork price at $78.67/cwt was $2.19 lower than on Thursday, based on USDA data.

Supermarkets stocked up on pork ahead of the weekend, but some packers are short on inventory through early next week as supplies tightened seasonally, a trader said.

Midwest hog dealers reported the morning’s hog prices around the region up $1/cwt from Thursday.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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