Chicago/Reuters – Chicago Mercantile Exchange live cattle futures at one point on Friday matched their 15-month low, responding to slumping prices for wholesale beef and market-ready, or cash, cattle, traders said.
Spot-October closed down 2.350 cents per lb to 140.600 cents, and December was 2.325 cents lower at 142.375 cents.
This week, cash cattle in the U.S. Plains moved at mostly $139 to $142 per cwt, compared with $142 to $143.50 a week ago, according to feedlot sources.
Friday morning’s wholesale choice beef price, or cutout, dropped $1.08 per cwt to $237.98 from Thursday. Select cuts slid 97 cents to $227.13, the U.S. Department of Agriculture said.
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“(Packers) all have good inventory even though sales are not huge, which means cattle feeders are throwing in the towel and just sending in the cattle and waiting for a check,” said David Hales, author of the Hales Cattle Letter.
Beef demand eased after Labor Day, which is traditionally the last grilling holiday of the summer, and in the face of more affordable pork and chicken.
Funds trading CME livestock futures at times shifted October long positions into back months in a process known as the “roll” by followers of the Standard & Poor’s Goldman Sachs Commodity Index.
Friday was the fourth of five days for the S&PGSCI roll process.
Live cattle futures losses and sharply higher corn prices following the USDA’s bullish grain reports sank CME feeder cattle. September closed 3.250 cents lower at 200.700 cents.
Hogs down with cash prices
CME lean hog futures fell as hefty supplies continued to erode cash prices while weakening wholesale pork values, traders said.
Spot October ended down 1.225 cents per lb at 67.325 cents, and December closed 0.900 cent lower at 62.650.
The USDA quoted the morning’s average cash hog price in Iowa/Minnesota at $67.01 per cwt in light volume, $2.67 lower than on Thursday.
Friday morning’s wholesale pork price was $84.37 per cwt, a 3-cent decline from Thursday, pressured mostly by the $5 drop in rib costs, the USDA said.
The government estimated Saturday’s kill at 310,000 head, compared with 63,000 a week earlier, as processors look to make up for plant closures over the three-day Labor Day weekend.
Fund selling developed after October and December drifted below their respective 100-day and 20-day moving averages of 67.92 cents and 62.64 cents.
