Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures finished lower on Wednesday, after investors pocketed profits while waiting for market-ready, or cash, cattle to change hands possibly before Friday, traders said.
April closed 0.8 cent/lb. lower at 136.3 cents, and June ended 0.425 cent lower at 125.925 (all figures US$).
Cash bids in Texas and Nebraska held at $136/cwt against cattle priced at $140-$142, said feedlot sources. A week ago, cattle in the U.S. Plains sold at $133-$137.
Despite their poor margins, packers signaled their need for supplies by bidding for them earlier in the week than usual, said traders and analysts.
They said expectations for fewer cattle in the weeks ahead, and grocers stocking up on meat to feature for grilling after the Easter holiday, work in favour of cash prices.
The morning’s wholesale choice beef price jumped $1.14/cwt from Tuesday, to $219.29. Select cuts fell 88 cents, to $212.09, the U.S. Department of Agriculture said.
Wednesday’s average beef packer margin was a negative $57.10 per head, up from a negative $61.25 on Tuesday and down from a negative $24.35 last week, as calculated by HedgersEdge.com.
Higher cash feeder cattle prices propped up CME’s March feeder cattle contract. Modest live cattle futures weighed on remaining feeder cattle trading months.
March closed up 0.25 cent/lb. to 158.3 cents, April ended down 0.125 cent to 157.825 cents and May finished down 0.15 cent to 156.475.
Mostly weak hog futures close
The morning’s cash price plunge weakened most lean hog contracts, with losses limited by higher wholesale pork values, trader said.
April closed 0.35 cent/lb. lower at 70.05 cents, May ended up 0.05 cent to 76.9 cents and June finished down 0.15 cent to 80.7.
Wednesday morning’s average cash hog price in Iowa/Minnesota had fallen $2.01/cwt from Tuesday in light volume to $64.32, the USDA said.
The morning wholesale pork price on Wednesday climbed $1.13/cwt from Tuesday to $75.95, based on government.
Grocers are purchasing product for immediate needs while gauging how much of it sells during Lent, the Catholic season of penance and prayer before Easter, a trader said.
During Lent, which this year runs Feb. 10 to March 24, many practicing Catholics fast on certain days and abstain from meats other than fish on Fridays.
Domenic Varricchio, a broker with Schwieterman Inc., said packers are not pressured to actively compete for hogs while trying to clear huge amounts of pork from storage.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.