Chicago | Reuters — Chicago Mercantile Exchange live cattle futures posted losses on Thursday, hit by slumping wholesale beef demand and initial technical selling, traders said.
But, short-covering and hopes of steady-to-better cash prices than last week for unsold cattle freed contracts from morning lows, they said.
August closed down 0.525 cent/lb. to 148.475 cents, and October 0.6 cent lower at 151.8 cents (all figures US$).
On Thursday, packers in the southern Plains stood their ground at $150/cwt bids after buying a few market-ready (cash) cattle at that price on Wednesday, feedlot sources said. Sellers are holding out for $153, they said.
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Last week, U.S. Plains cash cattle brought $148 to $152.
“A few packers showed they needed cattle by paying steady to $2 higher for them on Wednesday versus a week ago,” a trader said.
Packers might try to hold the line on cash after higher prices and the seasonal pullback in beef demand slashed their margins, he said.
Beef packer margins for Thursday were at a positive $1 per head, compared to a positive $26.20 on Wednesday and a positive $112.50 a week ago, as calculated by HedgersEdge.com.
Thursday morning’s wholesale choice beef price fell $2.22/cwt from Wednesday, and sank $10.46 from a week ago, to $239.81. Select cuts dropped $2.76, to $236.48, $11 lower than a week earlier, the U.S. Department of Agriculture said.
Live cattle market selling and firmer corn prices sank CME feeder cattle futures.
August closed down 1.875 cents/lb. to 211.75 cents.
Hog futures slide
CME lean hogs bowed to weaker cash and wholesale pork values, traders said.
July, which will expire on July 15, ended down 0.775 cent/lb. to 78.725 cents, and August 2.525 cents lower at 73.275 cents.
The average cash hog price in Iowa/Minnesota on Thursday morning had fallen $2.11/cwt in light volume from Wednesday, to $76, USDA said.
Separate government data showed the morning’s wholesale pork price at $80.55/cwt, down 72 cents from Wednesday.
Processors lowered cash bids after previously high prices and weaker pork demand landed their margins in the red, a trader said.
Tom Tippens, an analyst with West Oak Commodities, said cash and pork prices will fluctuate periodically, but the longer-term expectations are for plentiful hog numbers and product.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
