Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures finished lower on Thursday after traders took profits while waiting for this week’s cash cattle trade to develop, traders said.
Spot October closed 0.8 cent/lb. lower at 132.95 cents, and December down 0.875 cent, to 136.55 (all figures US$).
“It was a quiet day with people defensive before cash prices on Friday,” said a trader, adding that bullish investors will be disappointed if market-ready, or cash, prices are well below $133/cwt.
Packers in Kansas and Texas have bid $125/cwt for cash cattle versus mostly $135 asking prices, feedlot sources said. Last week, the bulk of cash cattle in the U.S. Plains fetched $126 to $127.
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Increased packer margins and much-improved beef cutout values, as retailers gear up to feature product in early November, may encourage processors to spend more for supplies than last week.
Thursday morning’s wholesale choice beef price, or cutout, was up 28 cents/cwt from Wednesday, to $210.89. Select cuts rose 84 cents, to $206.46, the U.S. Department of Agriculture said.
The average beef packer margin for Thursday was $87.60 per head, up from $78.45 on Wednesday, as calculated by HedgersEdge.com.
October ended 1.025 cents/lb. lower at 189.775 cents, pressured by sell stops and lower live cattle futures.
Most hog contracts finish lower
CME’s spot December hog contract was underpinned by its hefty discount to the exchange’s hog index for Oct. 13 at 74.94 cents, traders said.
They said the day’s setback in cash and wholesale pork prices limited December’s advances and dragged on other nearby trading months, they said.
December finished unchanged at 66.825 cents, February ended down 0.325 cent to 69.125 cents and April 0.35 cent lower, at 72.45.
The government reported Thursday morning’s average cash hog price in Iowa/Minnesota at $72.09/cwt, down $1.52 from Wednesday.
USDA reported the morning wholesale pork price at $87.07/cwt, $1.36 lower than on Wednesday, hit by the more than $3 cost drop for hams, butts and pork bellies.
Retailers have almost all the product they need to feature for the remainder of October Pork Month, according to analysts and traders.
“Unless there’s a few holes for Saturday to fill, I think for the most part they (packers) are pretty well bought heading into next week,” an Iowa hog dealer said.
Dealers and analysts projected a Saturday slaughter of more than 170,000 head.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
