Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed mixed on Monday after a choppy session that lacked clear fundamental direction.
“People are waiting for this week’s cash sales, but until then there is nothing to trade off of,” a trader said.
October live cattle ended at 156.35 cents per pound, up 0.075 cent, and December down 0.225 cent at 159.025 (all figures US$).
Last week, cash or market-ready cattle in Texas and Kansas fetched $161 to $162 per hundredweight (cwt), feedlot sources said.
October futures’ discount to last week’s cash cattle price stirred bull spreads, in which traders bought that contract and simultaneously sold December.
More cattle may be for sale after packers and feedlots in Nebraska last week were unable to agree on a price, analysts and traders said.
Some processors in the Northern Plains remain short on supplies while others have up to two weeks of inventory, they said.
Nonetheless, processors will be reluctant to bid up for cattle given their fading margins and lacklustre beef demand.
Monday afternoon’s choice wholesale beef price fell 91 cents/cwt from Friday to $249.02. Select dropped $1.26 to $233.28, the U.S. Department of Agriculture said.
Beef packer margins for Monday were a negative $41 per head, compared with a negative $13 on Friday and a positive $35.05 a week ago, according to Colorado-based analytics firm Hedgersedge.com.
CME feeder cattle closed weaker on profit-taking and the uptick in corn prices.
Traders lightened up September long positions ahead of the contract’s Sept. 25 expiration date.
September closed 0.225 cent/lb. lower at 229.25 cents, and October was at 225.85 cents, down 0.075 cent.
Hog futures close mixed
CME live hogs ended mixed, after an up-and-down session, as sharply higher wholesale pork prices prompted traders to buy October futures and at the same sell December, traders said.
October closed up 0.375 cent/lb. at 106.075 cents, and December at 95.85 cents, down 0.45 cent.
USDA data showed the afternoon’s wholesale pork price, or cutout, jumped $2.28/cwt from Friday to $108.85. The cutout climb was primarily led by the $8.26 surge in costs for loins that are mainly cut into pork chops and ribs.
Packers charged grocers more for pork to better their margins and offset mostly higher cash hog prices in recent weeks, a trader said.
Monday afternoon’s average price of hogs in Iowa/Minnesota was up 76 cents/cwt from Friday to $103.74, according to USDA.
Pork packer margins for Monday were a positive $1.90 per head, compared with a positive $6.80 on Friday and a positive $2.20 a week ago, as estimated by Hedgersedge.com.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.