U.S. livestock: CME live cattle sag on profit-taking

Chicago | Reuters –– Chicago Mercantile Exchange live cattle finished lower on Monday, pressured by profit-taking that erased Friday’s gains pegged to steady-to-better market-ready or cash cattle prices, traders said.

Monday was a day to evaluate this week’s cash cattle sales and subsequent wholesale beef prices, said Archer Financial Services broker Dennis Smith.

Last Friday, cash cattle in Texas moved at $146 per hundredweight (cwt), $1 higher than the week before, feedlot sources said (all figures US$). Cash cattle in Kansas traded at $146, which was steady with the prior week.

Cash cattle in Nebraska fetched $147 to $150/cwt, compared to $146 to $148 a week earlier, a feedlot source said.

Monday morning’s wholesale choice beef price rose 64 cents/cwt from Friday to $229.02. Select cuts fell 42 cents to $217.05, based on U.S. Department of Agriculture data.

Beef packer margins for Monday were at positive $1.95 per head, compared with a positive $15.10 on Friday and a negative $12.10 a week ago, as calculated by industry analytics firm HedgersEdge.com

Investors are waiting for feedlots to count the number of cattle available for sale this week.

A seasonal increase in supplies and thin margins are negative cash cattle price factors this week, analysts and traders said.

They said grocers looking to stock meat cases for Memorial Day grilling demand might underpin prices for cash cattle and beef at wholesale.

June live cattle closed 0.525 cent per pound lower at 137.525 cents, and August down 0.1 cent to 137.25.

CME feeder cattle finished lower, pressured by live cattle market selling and higher corn prices.

May closed 0.85 cent/lb. lower at 182.65 cents, and August fell 0.525 cent to 189.8.

Uneven hogs close

CME hog futures ended mixed, pressured by their premiums to the exchange’s index at 114.53 cents, but supported by the turnaround in wholesale pork prices, traders said.

USDA data showed the morning’s wholesale pork price, or cutout, jumped $2.11/cwt from Friday to $116.08, led by the $7.60 surge in costs for pork bellies.

The morning cutout climbed sharply, but traders are waiting to see if it holds up in the government’s afternoon price data, said Smith.

Grocers appear to be stocking up on pork for backyard cookouts after Mother’s Day, traders said.

Investors are unsure about near-term cash price direction, given Monday morning’s generally steady returns for slaughter-ready or cash hogs.

Some packers have all the hogs they need heading into Wednesday, but others may maintain steady cash bids to ensure themselves of supplies for later in the week.

Speculators bought back-month CME hogs in anticipation of tight supplies during that time frame as the porcine epidemic diarrhea virus sweeps through U.S. hog farms.

May hogs closed 0.325 cent/lb. lower at 116.9 cents, and June was up 0.125 cent to 122.35 cents.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

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