Chicago | Reuters — Chicago Mercantile Exchange live cattle futures posted losses for a second straight day on Friday, weighed down by lower prices for slaughter-ready or cash cattle and pork at wholesale, traders said.
Futures finished off session lows helped by their discounts to this week’s cash cattle returns and sentiment that the recent market selloff was overdone, they said.
October live cattle ended at 156.275 cents per pound, 1.1 cents lower, and December down 0.45 cent to 159.25 (all figures US$).
Cash cattle in Kansas sold at $161 to $162 per hundredweight (cwt), $1 to $2 lower than last week, feedlots sources said. They reported cash trades of $161 in Texas, down $2 from a week ago.
Investors await the sale of cattle in Nebraska where bids stood at $158/cwt against $164 asking prices, a feedlot source said.
Friday morning’s choice wholesale beef price sagged $1.01/cwt from Thursday to $250.53. Select fell 82 cents to $235.53, the U.S. Department of Agriculture said.
Packers balked at spending more for cattle after their margins turned red. And beef demand typically wanes after Labour Day, as preparing meals indoors gradually replaces backyard barbecues.
Funds trading in CME’s live cattle and hog markets shifted October long positions further back in a procedure known as the ‘roll’ by followers of the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI).
Friday was the last day for the S+PGSCI roll process.
CME feeder cattle drew support from buy stops and soft corn prices.
September closed 1.425 cents/lb. higher at 229.475 cents, and October was up 0.325 cent to 225.925 cents.
Hog futures finish lower
CME live hogs lost ground following mixed, rather than higher, cash prices and weak wholesale pork values, traders and analysts said.
October closed 0.675 cent/lb. lower at 105.7 cents, and December at 96.3 cents, 0.9 cent lower.
The morning’s average hog price in Iowa/Minnesota was up 54 cents/cwt from Thursday to $103.29, but down 24 cents in the eastern Midwest at $96.38, USDA said.
Separate government data showed the morning’s wholesale pork price fell 98 cents/cwt from Thursday to $106.55.
Some packers hiked hog bids to round out this week’s production and carry supplies into early next week, a trader said. Processors who are snug on inventories turned their attention to trying to shore up their margins, he said.
Meanwhile, processors may have discounted the price of some pork cuts to attract business for National Pork Month in October and winter holiday ham interest.
On Monday, investors will monitor cash prices to see if they have put in a near-term top, or resume their recent uptrend based on tight supplies.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.