U.S. livestock: CME live cattle supported by higher cash trade

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures settled up on Friday boosted by higher prices in the cash cattle market, traders said.

Cash cattle, or market-ready cattle, sold in the U.S. Plains at $155 to $156 per hundredweight (cwt), traders said (all figures US$). Last week, cash cattle in Kansas and Nebraska moved at mostly $153 to $155/cwt.

Steady retail demand for beef products combined with packers needing slaughter supplies supported this week’s higher cash cattle prices, said Lane Broadbent of KIS Futures.

Many packers needed slaughter supplies for the holiday shortened processing week, but some were cautious buyers as softer wholesale prices weigh on profit margins.

On Friday morning, the choice wholesale beef price, or cutout, fell 90 cents/cwt from Thursday to $245.99. Select fell 49 cents to $234.78.

Packers profit margins were at $48.90 per head on Friday, down from $60.55 per head, compared with $64.95 a week ago, according to Colorado-based analytics firm HedgersEdge.com.

October CME live cattle touched its highest level since Aug. 12, largely fuelled by the anticipation of steady to higher cash trade.

CME August live cattle expired at noon CT on Friday, leaving October as the front-month contract. October live cattle settled at 151.425, up 1.325 cents.

CME feeder cattle gained for a seventh straight session fuelled by strength in the live cattle market. CME September feeder cattle closed up 1.5 cents, at 218.65 cents.

Hogs finish higher

Front-month CME October hogs settled higher on the day after briefly touching its three-cent trading limit mid-session on Friday, boosted by short-covering and seasonal buy recommendations, a trader said.

CME October hogs closed 2.65 cents per pound higher at 98.125 cents, the highest level since October 12. CME December hogs closed at 92 cents, up 1.625.

USDA’s Friday morning direct hog market prices were unavailable. Midwest hog dealers said prices in the region were held fairly steady in the range of $66 to $68/cwt.

The dealers said packers were not aggressively buying hogs as many had next week’s slaughter filled already and most plants were scheduled to be closed on Monday for the Labour Day holiday.

Grocers remained cautious buyers which pressured wholesale product prices. The morning’s wholesale pork price dipped $1/cwt from Thursday to $101.62, USDA said.

The wholesale buyers will evaluate how much pork product moved over the three-day holiday weekend before booking additional meat purchases.

— Meredith Davis reports on ag commodities for Reuters from Chicago.

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