Chicago | Reuters — Chicago Mercantile Exchange live cattle futures finished mostly firm on Monday after a volatile session stirred by bear spreading as investors sold the October contract and bought deferred months, traders said.
They added that negative market fundamentals and anticipation of possible deliveries next Monday (Oct. 5) contributed to active bear spreading.
Spot-October closed 1.525 cents/lb. lower at 132.175 cents, December up 0.15 cent, to 137.15, and February 0.625 cent higher at 138.125 (all figures US$).
Monday morning’s wholesale choice beef price slid 91 cents/cwt from Friday, to $211.32. Select cuts dropped 57 cents, to $209.23, the U.S. Department of Agriculture said.
Investors were awaiting this week’s cash sales. Packers last week paid $128-$130/cwt for market-ready (cash) cattle. That was down as much as $6 from the week before.
Some traders and analysts believe it could take at least another two weeks for packers to clear up heavyweight cattle that have dragged on cash and wholesale beef prices in September.
CME live cattle traders adjusting positions as the end of the quarter approaches monitored disappointing Chinese economic data that sent U.S. stock futures tumbling.
“Everybody is keeping an eye on it (stocks) because it could influence end-of-the-month and end-of-the-quarter decisions,” a CME livestock trader said.
CME feeder cattle ended weak, except October that was supported by its discount to the exchange’s feeder cattle for Sept. 24 at 194.81 cents.
Anticipation of lower cash feeder cattle prices this week pressured remaining contracts.
October ended at 185.275 cents/lb., up 0.675 cent, November down 0.15 cent, to 181.45 cents, and January closed 0.45 cent lower at 175.7.
Uneven hogs settlement
CME lean hogs closed mixed after investors adjusted positions in response to Friday’s government quarterly hog report.
Traders largely viewed the report as neutral, but it implied continued heavy supplies through the rest of the year and fewer hogs beginning early in 2016.
Spot-October hogs closed 0.45 cent/lb. lower at 71.425 cents, and December down 0.025 cent, to 65.75 cents. February closed up 0.225 cent, to 69.175, and April 0.275 cent higher, at 72.125 cents.
Cash price uncertainty further weighed on the October contract, while higher wholesale pork values limited losses.
Cash hogs in the Midwest on Monday were inline with Friday’s prices, regional hog dealers said.
The morning’s wholesale pork price was at $85.04/cwt, $1.10 higher than on Friday, according to USDA.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.