Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed higher for a second straight session on Friday in anticipation of this week’s cash prices, traders said.
Spot-August futures, which will expire on Monday, ended 1.875 cents/lb. higher at 146.525 cents, and October up 1.425 cents, at 143.975 cents (all figures US$).
“Feedyards and packers waited for futures to close before making their move,” said a trader who predicted market-ready, or cash, sales of $146-$147/cwt.
Early on Friday, processors in Kansas and Texas raised cash bids to $145 from $144 as sellers held out for at least $147, feedlot sources said. Last week, cash cattle in the U.S. Plains sold at $147-$149.
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Packers may try to conserve their profitable margins by cutting kills while drawing from significant numbers of cattle they bought last week, said traders and analysts.
Also, processors may balk at spending more for cattle as pricey beef is challenged by plentiful more-affordable pork and chicken for Labour Day holiday barbecues, he said.
Friday morning’s wholesale choice beef price dropped 58 cents, to $243.63/cwt, from Thursday. Select cuts were down 29 cents, to $232.83, the U.S. Department of Agriculture said.
October and December earlier pierced their respective 10-day moving average resistance levels of 144.15 and 146.23 cents, which triggered buy stops and fund buying.
Technical buying and live cattle futures advances drove up CME feeder cattle contracts, with September closing 2.05 cents higher at 202.4 cents.
Flat/lower hog futures close
CME lean hogs were pressured by weaker cash prices, but futures’ discounts to the exchange’s hog index for Aug. 26 at 78.68 cents underpinned the December contract, traders said.
Spot-October contract closed 0.625 cent/lb. lower at 66.425 cents, December unchanged at 62.05 cents and February ended down 0.25 cent, at 66.175.
USDA reported the morning’s western U.S. Midwest average cash hog price at $70.34/cwt in light volume, $2.77 lower than on Thursday.
Farmers who sent hogs to packing plants ahead of schedule, with lower prices in mind as the Labour Day holiday approaches, have exacerbated already ample supplies, a trader said.
Pork demand held up reasonably well considering the increased hog numbers, he said.
Friday morning’s wholesale pork price was at $85.27/cwt, up 58 cents from Thursday, led by the bounce in ribs and pork bellies, based on USDA data.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
