U.S. livestock: Lower beef quote undermines CME live cattle

(Canada Beef Inc. photo)

Chicago | Reuters — Chicago Mercantile Exchange live cattle closed lower on Thursday after profit-taking and a drop in the day’s wholesale beef price ended a two-day rally, traders said.

Spot December and February finished 1.075 cents/lb. lower at 129.9 and 132.05 cents, respectively (all figures US$).

Thursday morning’s wholesale choice beef price had fallen $1.60/cwt from Wednesday, to $205.08. Select cuts slumped $2.66, to $194.04, based on U.S. Department of Agriculture data.

“Big beef losses are likely undercutting the potential for better cash prices on Friday,” said Doane Advisory Services economist Dan Vaught.

On Thursday, market-ready (cash) cattle bids in Kansas surfaced at $125 versus up to $133 asking prices there and elsewhere in the U.S. Plains, said feedlot sources. Last week, cash cattle sold at $126 to $129.

Beef demand continues to face seasonal headwinds from heavily promoted turkey and ham ahead of the winter holidays, said traders and analysts.

And, they said, some packing plants will be closed more than one day during the Thanksgiving holiday, thereby reducing their need for supplies.

Some market participants clung to the sidelines, given recent market volatility and ahead of USDA’s monthly Cattle on Feed report on Friday.

Analysts look for Friday’s report to show fewer cattle placed in feedlots in October than a year earlier.

CME November feeder cattle, which expired at noon CT, closed 0.35 cent/lb. higher at 175.225. That was nearly in line with the exchange’s feeder cattle index for Nov. 18 at 175.77 cents.

Remaining contracts were pressured by live cattle market selling, with January feeders closing 1.5 cents lower at 162.45.

Hog futures rise

CME lean hogs drew strength from the two-day run-up in wholesale pork values that ignited more short-covering, traders said.

December led advances while trying to keep pace with the exchange’s hog index for Nov. 17 at 56.04 cents, they said.

Spot December finished 1.025 cents/lb. higher at 55.4 cents, and February up 0.45 cent to 56.725 cents.

Thursday morning’s wholesale pork price jumped $2.70/cwt from Wednesday to $74.89, driven by higher costs for all cuts except butts, the USDA said.

However, cash prices lagged amid the seasonal buildup in supplies at a time when packers prepare to shutdown plants over the Thanksgiving holiday.

Cash hog prices in the western Midwest on Thursday morning slipped 67 cents/cwt from Wednesday to $51.29, according to USDA.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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