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U.S. livestock: CME live cattle slide off three-month peak

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Thursday peaked at a three-month high before profit-taking dropped contracts to near session lows, said traders.

December live cattle closed down 0.175 cent/lb. to 110.575 cents, and February ended 0.575 cent lower at 111.375 cents (all figures US$).

CME live cattle futures receded in spite of this week’s stronger-than-expected prices for market-ready, or cash, cattle and much improved wholesale beef demand.

People are not confident that beef demand is going to hold given the availability of cheap poultry and pork, said U.S. Commodities analyst Don Roose.

Packers this week paid $114-$115/cwt for cash cattle in the U.S. Plains that last week brought $110-$113, according to feedlot sources and the U.S. Department of Agriculture.

Most of the animals sold at Wednesday morning’s Fed Cattle Exchange fetched mostly $111.50 to $113.25/cwt versus up to $109.75 there a week earlier.

Thursday morning’s choice wholesale beef price fell 43 cents/cwt from Wednesday to $189.52. Select cuts were up 21 cents, to $172.98, USDA said.

CME feeder cattle traded in sympathy with weaker live cattle futures. January feeders ended 0.65 cent lower at 127.775 cents.

Hog futures end lower

Investors pocketed profits in CME’s lean hog market, prompted by cash price jitters and futures’ premiums to the exchange’s hog index for Nov. 29 at 48.22 cents, said traders.

They said nearby hog contracts drifted below key technical support levels which triggered sell stops and fund liquidation.

December closed down 0.8 cent/lb. to 50.225 cents, and below the 100-day moving average of 50.719 cents. Most actively-traded February ended 1.150 cents/lb. lower at 54.075 cents and under the 20-day moving average of 54.57 cents.

“Cash prices are mildly moving up, but futures’ premiums are too big,” said Roose.

Thursday morning’s average cash hog price in Iowa/Minnesota gained nine cents/cwt from Wednesday in light volume to $44.06, USDA said.

Processors upped cash bids for five straight sessions to capitalize on extremely profitable margins while encountering supply headwinds for post-Thanksgiving production.

“Packers want to gobble up all the hogs they can because of fairly robust pork demand and extremely favourable margins,” a Midwest hog merchant said.

The morning’s wholesale pork price on Thursday jumped $1.09/cwt from Wednesday to $74.41, USDA said.

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

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