Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Wednesday settled in negative territory for an eighth straight day, and hit a one-month low, following disappointing preliminary cash prices, traders said.
August live cattle ended down 0.525 cent/lb. at 112.725 cents (all figures US$). Most actively traded October closed 0.825 cent lower at 108.9 cents.
On Wednesday morning market-ready, or cash, cattle in Kansas moved at $115/cwt, down $2 to $3 from last week there, said feedlot sources. Cash bids elsewhere in Kansas and the U.S. Plains were at $114 to $115 versus $120 asking prices, they said.
Usually if packers bid early in the week for cattle, sellers hold out until Friday, said KIS Futures vice-president Lane Broadbent. “But now it appears packers are buying cattle on their own terms, which is disappointing.”
Fallen futures prices have discouraged feedlots from keeping cattle longer, despite cheaper feed costs and healthy grazing pasture, said analysts.
They said feedlots realize cash prices could take another hit next week as processors buy for the Labour Day holiday-shortened work week.
Another worry for cash prices is that beef demand typically slows after the holiday when consumers switch from grilling items to product more conducive for cooking indoors.
The morning’s choice beef price was up 21 cents/cwt from Tuesday to $200.60. Select cuts were 88 cents higher at $194.54, according to the U.S. Department of Agriculture.
CME feeder cattle August futures, which will expire on Thursday, were supported by their discount to the exchange’s feeder cattle index for Aug. 22 at 147.84 cents.
Technical selling and live cattle futures losses dropped remaining feeder cattle contracts.
August feeders closed 0.2 cent/lb. higher at 146.65 cents. Most actively traded September ended down 0.925 cent, to 143 cents, and October closed 1.375 cents lower at 139.075 cents.
Weaker hog market close
Fund selling and lower cash prices, due to seasonally hefty supplies, pressured CME lean hogs, said traders.
“I have a lot more hogs booked for sale to packers already for September than I did for August,” a Midwest hog merchant said.
October ended down 0.2 cent/lb., to 60.325 cents, and December finished 0.475 cent lower at 56.05 cents.
Both contracts ended below their respective 10-day moving average of 60.64 and 60.72 cents.
The government reported Wednesday morning’s average cash hog price in Iowa/Minnesota fell 77 cents/cwt from Tuesday to $63.26.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.