Chicago | Reuters — Chicago Mercantile Exchange live cattle closed lower on Wednesday after investors pocketed profits while waiting for this week’s prices for market-ready (cash) cattle, traders said.
April closed 1.45 cents per pound lower at 161.55 cents, and June was down 0.875 cent at 151.45 cents (all figures US$).
Cash cattle bids surfaced in Kansas at $165 per hundredweight (cwt) versus $170 asking prices there and elsewhere in the U.S. Plains, industry sources said. Last week, packers paid $167-$169 for supplies.
Bullish investors expect packers to pay more for cattle as long as they can pass that cost on to retailers who need beef for spring grilling demand.
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Contrarians point to more cattle for sale this week, poor packer margins and high-priced beef that could take a backseat to cheaper pork and chicken.
Various cross currents are sending conflicting signals to the market, which is stirring volatility with neither the bulls nor the bears firm in their convictions, said independent livestock futures trader Dan Norcini.
Wednesday morning’s choice wholesale beef price jumped $2.78/cwt from Tuesday to $259.76. Select cuts climbed 89 cents, to $252.12, according to the U.S. Department of Agriculture (USDA).
The day’s beef packer margins were a negative $46.25 per head, compared with a negative $45.90 on Tuesday and a negative $28.65 per head a week ago, according to HedgersEdge.com.
CME feeder cattle finished lower, partly on technical selling and live cattle futures losses.
April closed 1.45 cents/lb. lower at 216.225 cents, and May ended down 1.475 cents at 213.475 cents.
Most hog contracts rise
CME lean hogs finished mostly higher following firmer cash and wholesale pork prices, while April lagged on selling before it expires on April 15, traders said
April closed 0.275 cent/lb. weaker at 62.3 cents, May 1.225 cent higher at 70.225 cents, and June ended up 0.75 cent at 77.1 cents.
USDA data showed the morning’s average cash hog price in Iowa/Minnesota was $58.23/cwt, up 23 cents from Tuesday.
Wednesday morning’s wholesale pork price gained 11 cents/cwt, to $65.43, USDA said.
Based on declining hog weights, the market is possibly looking ahead to reduced slaughters after farmers sent hogs to market ahead of schedule to avoid lower prices, Norcini said.
Thinly traded May futures led advances after it broke through the 20-day moving average resistance level of 69.18 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago. Additional reporting for Reuters by Meredith Davis in Chicago.
