Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Friday fell modestly as investors tweaked positions before the U.S. Department of Agriculture’s monthly Cattle-on-Feed report at 2 p.m. CT, traders said.
Analysts expect Friday’s data to show increased cattle placements last month as profitable margins allowed feedlots to bring in more calves for fattening.
The government will issue the monthly cold storage report on Friday, which will include total beef and pork stocks in February.
Futures eased from morning highs, initially supported by steady to higher prices for market-ready or cash cattle led by profitable packer margins and tight supplies this week.
Nervousness about Friday’s USDA cattle report and near-term beef cutout price direction sidelined buyers.
This week, cash cattle in Texas and Kansas moved at $150 per hundredweight (cwt), up $2 from last week, feedlot sources said (all figures US$). Cash cattle in Nebraska fetched $152, steady to $1 higher than a week ago, they said.
The morning’s wholesale beef price, or cutout, for choice cuts dropped 74 cents/cwt to $240.83. Select cuts rose 18 cents to $234.95, based on USDA data.
Beef packer margins for Friday were estimated at a positive $10.30 per head, compared with a positive $24.15 on Thursday and a positive $34.55 a week ago, as calculated by HedgersEdge.com.
April live cattle closed 0.425 cent per pound lower, at 144 cents, and June ended at 136.125 cents, down 0.075 cents.
Higher prices for feeder cattle in the spot market and short-covering lifted CME feeder cattle to an all-time high.
March ended 1.4 cents/lb. higher at 175.025 cents, and reached a new contract high of 175.175 cents in electronic trading.
April closed 0.625 cent higher at 175.275 cents.
Mixed hog futures
CME hogs settled mixed, with April supported by higher cash prices while June was pressured by profit-taking, traders said.
Friday morning’s hog price at the closely watched Iowa/Minnesota market reached a record high $127.73/cwt, topping, Thursday’s $125.79 record, according to USDA.
Worries about a supply squeeze ahead pegged to the deadly U.S. pig virus spread prompted packers to spend more for hogs while cutting back production, a trader said.
Grocers may resist buying pork at current prices, especially after putting enough product in freezers to avoid tight supplies during the spring and summer grilling period, he said.
Government data on Friday showed the morning’s price of wholesale pork at $131.04/cwt, down 22 cents from Thursday’s $131.26 record high.
On Friday, packers processed an estimated 359,000 hogs, down 1,000 from last week and 64,000 fewer than a year earlier, according to USDA.
April closed 0.875 cent/lb. higher at 125.675 cents, and June down 0.475 cent to 130.325 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.