U.S. livestock: More CME live cattle selling on weaker cash outlook

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures’ losing streak stretched to a seventh consecutive session on Tuesday in anticipation of softer cash prices by Friday, traders said.

August live cattle ended down 0.175 cent/lb. to 113.25 cents (all figures US$). Most actively traded October closed 0.625 cent lower at 109.725 cents.

Bids for market-ready, or cash, cattle surfaced in Texas and Kansas at $115/cwt with sellers asking more than $120, said feedlot sources.

Last week, cash cattle in the U.S. Plains moved at mostly $117 to $118/cwt.

Investors believe packers will balk at spending more for supplies given current futures prices and tepid wholesale demand for beef at a time when grocers typically stock up for Labour Day holiday barbecuing, said traders and analysts.

The morning’s choice beef price dropped 57 cents/cwt from Monday, to $200.57. Select cuts were up 36 cents, to $194.23, USDA said.

Market bulls were defensive following Friday’s bearish U.S. Department of Agriculture monthly Cattle on Feed report that showed more animals placed in feedlots than expected.

The trade is possibly thinking another huge number of cattle will be available later based on Friday’s report that showed higher placements and on-feed results, said Schwieterman Inc. broker Domenic Varricchio.

Live cattle futures selling and lower cash feeder cattle prices pressured CME feeder cattle contracts.

August feeders, which will expire on Thursday, closed 0.575 cent/lb. lower at 146.45 cents. Most actively traded September ended down 0.5 cent, to 143.925 cents.

Lower hog market settlement

The morning’s lower cash and wholesale pork prices pulled down CME lean hogs, said traders.

October ended 0.625 cent/lb. lower at 60.525 cents, and December finished 0.525 cent lower at 56.525 cents.

Tuesday morning’s wholesale pork price slipped 19 cents/cwt to $75.61 from Monday, USDA said.

The government reported Tuesday morning’s average cash hog price in Iowa/Minnesota fell $1.05/cwt from Monday, to $63.66.

“There’s plenty of hogs around for them (packers)… so why pay up for them?” said Varricchio.

Monday and Tuesday’s combined slaughter totaled 870,000 head, 12,000 more than in the same period last week, based on USDA estimates.

Some farmers may be sending hogs to market ahead of schedule to avoid potentially lower prices before plant closures for the Labour Day holiday, traders and Midwest hog
merchants said.

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

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