U.S. livestock: CME live cattle slump before USDA report

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures retreated on Friday ahead of the bulk of this week’s cash sales, later in the afternoon, and the government’s monthly Cattle on Feed report at 2 p.m. CT, traders said.

April live cattle ended 1.325 cents/lb. lower at 139.825, and June closed 1.6 cents lower at 129.1 (all figures US$).

On Friday morning, a small number of market-ready, or cash, cattle in Texas traded at $140/cwt, up $2 from last week’s sales in the U.S. Plains, said feedlot sources.

They said bids for remaining cattle in Texas and Kansas were at $136 to $137/cwt as sellers held out for at least $142.

Investors look for unsold cattle to fetch at least $140/cwt, given positive packer margins, fewer animals for sale than last week and the prospect of tight supplies in the coming weeks.

Friday’s estimated average beef packer margin was $56.85 per head, up from $50.70 on Thursday, as calculated by HedgersEdge.com.

Bullish traders worried that wholesale beef prices were about to top out after their recent surge to two-month highs.

“This thing (cutout) put too much on too fast, which may have choked off demand at the wholesale level,” a trader said.

The morning’s wholesale choice beef price, or cutout, tumbled $2.35/cwt from Thursday to $232.29. Select cuts gained 34 cents, to $223.31, USDA said.

CME live cattle futures losses sent feeder cattle contracts lower. March closed 0.5 cent/lb. lower at 163.225 cents.

Firm hog market settlement

Speculative buying and short-covering lifted CME lean hogs, traders said.

April closed up 0.15 cent/lb. at 71.45 cents, and May ended 0.2 cent/lb. higher at 79.775 cents.

Hog contracts fluctuated within a narrow range while waiting for clear cash hog and wholesale pork price direction, a trader said.

USDA’s morning direct cash hog prices were unavailable because of the lack of sufficient packer involvement to establish a market.

The wholesale pork price early on Friday rose 71 cents/cwt from Thursday to $76.66, USDA said.

Cash prices may feel pressure from plant closures over the Good Friday and Easter Monday holidays, said hog buyers in the Midwest.

They said at least one packing plant that was closed on Thursday, and partly on Friday, will make up the downtime on Saturday or schedule those pigs for early next week.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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