Chicago/Reuters – Most live cattle futures on the Chicago Mercantile Exchange gained modestly on Monday, with December pulled down by its premium to last week’s prices for market-ready, or cash, cattle, traders said.
They added that funds sold the CME live cattle and lean hog December contracts, and simultaneously bought deferred trading months, in advance of similar moves expected later in the week in association with the Standard & Poor’s Goldman Sachs Commodity Index (S&PGSCI).
The first of five days of the process, known as the S&PGSCI “roll,” will officially begin on Friday.
Last week, cash cattle in the U.S. Plains moved at $133 to $138.50 per cwt, compared with $134.50 to $138 the week before, feedlot sources said.
Cash prices this week may be no better than last week’s sales as beef demand stalls amid increased supplies of heavyweight cattle, said U.S. Commodities analyst Don Roose.
Monday afternoon’s wholesale choice beef price had declined 43 cents per cwt from Friday to $219.61. Select cuts were up 45 cents to $212.52, the U.S. Department of Agriculture said.
Spot December settled down 0.050 cent per cwt at 141.675 cents, February was up 0.275 cent at 143.700 cents and April was 0.150 cent higher at 142.275.
CME feeder cattle spot-November closed 1.375 cents per lb higher at 192.275 cents, with strength from lower corn futures and higher cash feeder cattle prices.
HOGS CLOSE LOWER
Deteriorating cash prices continued to drag on CME lean hogs, traders said.
Spot December closed 0.975 cent per lb lower at 58.225 cents, and February was own 0.775 cent at 61.975.
Cash hog prices in the Iowa/Minnesota market on Monday afternoon sagged $1.69 per cwt from Friday to $63.50, the USDA said.
“The big problem with hogs is you have supplies starting to grow and weights sneaking up seasonally,” said Roose.
Investors are eyeing wholesale pork cutout values, with supermarkets looking to feature mostly ham and turkey during the Thanksgiving and Christmas holidays, traders and analysts said.
Separate government data showed the afternoon’s wholesale pork price, or cutout, rose $1.36 per cwt from Friday to $79.50, helped by the almost $4 jump in pork belly costs.
Pork belly prices may have come down enough recently to entice storage for use next spring and summer, a trader said. (Editing by Matthew Lewis)