U.S. livestock: CME live, feeder cattle end limit-down

(CMEGroup.com)

Chicago | Reuters — Chicago Mercantile Exchange (CME) live cattle futures closed down the maximum three cents per pound allowed under the daily price limit on Friday, pressured by steady to lower returns for unsold market-ready or cash cattle based on sales earlier in the week.

On Friday, cash cattle in Texas moved at $160 per hundredweight (cwt), down $1 from Thursday and $2 lower than last week, feedlot sources said (all figures US$). Cash cattle in Kansas fetched $160, steady compared to Thursday and down $3 from a week ago, they said.

Feedlot sources reported Nebraska cash sales of $160/cwt, $4 lower than Wednesday’s trade and down $2 to $4 from last week.

Given futures’ limit-down trade two days in a row, the market may be looking ahead to possible lower cash prices next week, said KIS Futures vice president Lane Broadbent.

Packers lowered cash cattle bids and curbed slaughters to compensate for generally tight supplies. Processors avoided spending more for supplies in response to this week’s futures losses, hastened by fund liquidation.

The beef cutout moved lower after packers discounted prices to attract retailers looking to stock meat cases for Labour Day holiday grilling demand.

Friday afternoon’s choice wholesale beef price dropped $1.96 per pound from Thursday, to $260.45. Select beef slumped $2.26, to $253, the U.S. Department of Agriculture said.

Bearish fundamental news hurt CME live cattle futures as investors continued to ponder long-term beef and pork demand implications after Russia banned meat imports from the West. [Related story]

“Nobody really has a clear handle on the Russian thing, so that’s still hanging over the livestock markets,” a trader said.

Live cattle August and October closed down three cents per pound at 152.55 and 150 cents, respectively.

CME feeder cattle took its cue from live cattle limit losses and talk of lower prices for feeder cattle in some local markets.

August and September also closed three cents per pound lower at 215.325 and 214.725 cents.

Hogs down after wild ride

CME hogs closed lower, pressured by weak cash and wholesale beef values as heavy hogs mitigated lost production pegged to the deadly pig virus on U.S. farms, traders said.

August closed down one cent per pound to 114.225 cents, and October ended 0.925 cent lower at 99.325 cents.

The afternoon’s average price of hogs in Iowa/Minnesota dipped 15 cents/cwt from Thursday, to $114.32, USDA said.

Separate government data showed the afternoon’s wholesale pork price at $124.99/cwt, $1.43 lower than Thursday.

Futures’ attempt at a pre-weekend short-covering rally faded in the face of the live cattle market’s abrupt selloff.

“Hogs have been trying… but the cattle being limit down makes it hard to build any bullish enthusiasm,” a trader said.

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

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