U.S. livestock: CME live cattle snap four-day losing streak

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle finished the week on a positive note, fueled by short-covering and bargain hunting that halted future’s four-day skid, traders said.

Spot-October settled 1.675 cents higher at 123.075 cents/lb., and December 1.375 cents higher at 131.375 cents (all figures US$).

CME live cattle’s Relative Strength Index (RSI) at 19 attracted more buyers. A RSI below 30 suggests that a market is technically oversold.

“Nothing has changed fundamentally. Cattle weights are still high and beef prices are still low,” said a trader who is skeptical of the day’s rally.

This week, market-ready (cash) cattle in the U.S. Plains brought mostly $119 to $124/cwt, down from $128 to $132 a week ago, feedlot sources said. Cash cattle prices began the first week in September at $144 to $147.

Friday morning’s wholesale choice beef price was at $206.75/cwt, down 80 cents from Thursday and $34.21 lower than Sept. 2. Select cuts was at $203.38, up 28 from Thursday, but down $27.16 from a month ago, based on U.S. Department of Agriculture data.

Falling cash and wholesale beef values should stabilize by the middle of October when retailers buy more product for post-October Pork Month advertisements, traders and analysts said.

They said, however, meat sales could be dampened and pork production interrupted in the east if Hurricane Joaquin skirts the coast early next week.

CME live cattle buying halted the three-day drop in the exchange’s feeder cattle contracts, with October ending 2.1 cents higher at 179.5 cents.

Hogs feed off cattle gains

CME lean hogs drew support from short-covering and buying in the neighbouring live cattle market, traders said.

Deferred hog futures benefited from their discounts to the exchange’s hog index for Sept. 30 at 72.65 cents.

Spot-October, which will expire on Sept. 14, closed up 0.725 cent/lb., to 73.35 cents, and December 0.85 cents higher at 65.375.

Futures made significant headway despite mildly supportive pork cutout values and soft cash hog prices.

Supermarkets have most of what they need for Pork Month while packers are looking beyond Saturday’s 134,000-head kill and ahead to next week’s production, said traders.

USDA reported Friday morning’s Iowa/Minnesota average cash hog price was at $71.45/cwt in light volume, down 30 cents from Thursday.

The government quoted the morning’s wholesale pork price at $86.51/cwt, up 10 cents from Thursday.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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