Chicago/Reuters – Chicago Mercantile Exchange live cattle futures on Friday settled in negative territory for the third straight day after cash prices fell short of investors’ expectations, said traders.
CME live cattle losses mounted after falling below technical support levels, which triggered sell stops and fund liquidation.
Most actively-traded December live cattle closed 1.350 cents per pound lower at 102.725 cents, and below the 40-day moving average of 103.24 cents.
This week, slaughter ready, or cash, cattle in the U.S. Plains brought $102 to $105 per cwt, compared to $104 and $105 last week, said analysts and feedlot operators.
Investors had expected packers to pay more for supplies given their extremely profitable margins, far fewer animals for sale than last week and $104 to $106 per cwt cash prices at Wednesday’s Fed Cattle Exchange (FCE).
A lot of traders anticipated higher cash prices in large part because of FCE’s transactions, said Oak Investment Group President Joe Ocrant.
He said, however, that FCE cattle prices will not reflect overall cash trades in the Plains until their sales volume increases.
Market participants are looking ahead to next week’s cash transactions while keeping close tabs on wholesale demand for beef as it competes with ham and turkey during the winter holiday season.
Friday morning’s choice wholesale beef price was up 28 cents per cwt from Thursday to $189.02. Select cuts slipped 12 cents to $173.75, the U.S. Department of Agriculture said. November feeders finished down 0.225 cent per lb to 125.625 cents, weakened by technical selling and live cattle futures losses.
Hogs slip again
Profit-taking and plentiful supplies that continue to depress cash hog prices sent CME lean hogs lower for a second straight session, said traders.
December lean hogs closed 0.850 cents per lb lower at 46.150 cents, and February down 0.525 cent to 52.975 cent.
On Friday morning cash hogs in the Midwest sold steady to 50 cents per cwt lower, according to regional hog merchants. USDA estimated this week’s hog slaughter at 2.532 million head.
It would be the highest weekly slaughter on record eclipsing the previous high two weeks ago of 2.524 million head.