U.S. livestock: Profit-taking ends CME live cattle’s win streak

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed lower on Monday, hit by profit-taking after gaining five days in a row driven by potential supply shortages as inclement weather moves across the U.S. Plains, traders said.

Wintry weather typically slows down cattle weight gains while creating problems for employees and livestock to reach packing plants.

Spot December, which will expire on Dec. 31, settled down 0.25 cent/lb. to 130.85 cents, and February 0.875 cent lower at 136.150 cents (all figures US$).

Futures slid despite the recent run-up in cash and wholesale beef prices, fuelled by tighter cattle numbers as a result of the storm on Monday.

Monday morning’s wholesale choice beef price surged $3.46/cwt from Thursday, to $201.09. Select cuts climbed $3.73, to $193.20, based on U.S. Department of Agriculture data.

Last week, market-ready, or cash, cattle in U.S. Plains traded at $122-$124/cwt, as much as $6 higher than in the previous week.

On Monday, packers processed 90,000 head of cattle, 21,000 less than last week, based on USDA estimates.

“It’s understandable that the market would take a pause after such a huge rally last week because of the storm,” a trader said.

He expects packers later this week to pay the same or more for cattle than last week while buying for the first full week of production after the Christmas and New Year’s holidays.

January feeder cattle ended 0.825 cent lower at 162.65 cents, following CME live cattle futures selling.

Hog futures settle higher

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

Spot February settled up 0.825 cent/lb. at 59.125 cents, and April 0.975 cent higher at 66.05 cents.

Cash hogs in the western Midwest market on Monday morning were at $48.81 per cwt, up 26 cents from Thursday, USDA said.

The morning’s wholesale pork price rose $1.80/cwt to $71.46 from Thursday, following the $7.20 jump in ham values, USDA said.

Some packers are reluctant to slash cash bids knowing that wintry weather in the Midwest could limit the movement of hogs to market, an analyst said.

He said grocers may be buying pork on fears of a supply shortage after packers curtailed operations over the year-end holidays.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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