U.S. livestock: CME live cattle stretch losses to ninth straight day

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle contracts on Thursday tallied losses for a ninth day in a row, pressured by bearish market fundamentals that offset futures’ discount to cash prices, traders said.

August live cattle ended down 0.25 cent/lb., to 112.475 cents (all figures US$). Most actively traded October closed 0.375 cent lower at 108.525 cents.

The cattle and beef sectors have struggled at a time when demand typically increases for Labour Day grilling and government purchases for school lunch programs, said U.S. Commodities analyst Don Roose.

“We were looking for demand to hold us together and that’s been a failure. Now we’re looking at the supply side which has too much meat,” he said.

Packers this week paid $114-$116/cwt for market-ready, or cash, cattle that last week brought $117-$118, said feedlot sources.

From Monday to Thursday, packers processed 451,000 head of cattle, up 14,000 from the same period last year, according to U.S. Department of Agriculture estimates.

Sell stops, fund liquidation and weaker CME live cattle futures sank CME feeder cattle contracts.

August feeders, which expired at noon CT, settled at 146.725 cents/lb., up 0.075 cent. It closed just shy of the exchange’s feeder cattle index for Aug. 24 at 147.29 cents.

Most actively traded September ended down 1.2 cents, to 141.8 cents, and October 0.975 cent lower at 138.1 cents.

Hog futures close lower

Technical selling and more cash price weakness pulled down CME lean hogs, said traders.

October ended 1.625 cents per pound lower at 58.7 cents, and December finished 1.575 cents lower at 54.475 cents.

Both contracts closed below their respective 20-day moving average of 59.88 and 55.61 cents.

The government reported Thursday morning’s average cash hog price in Iowa/Minnesota had fallen 73 cents/cwt from Wednesday, to $63.

Hog and pork demand soared after the porcine epidemic diarrhea virus three years ago shrank hog supplies, said Roose.

“Now we’ve reached a level where we have too big of a supply and too little demand.”

Hogs have become more plentiful as their numbers and animal weights start to rise in parts of the Midwest due to less heat and humidity, which is favourable for raising pigs, a Midwest hog merchant said.

He said hog supplies tend to build around early September as temperatures begin to moderate across most of the Midwest heading into the fall.

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

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