Chicago | Reuters — Chicago Mercantile Exchange live cattle futures finished lower on Wednesday, pressured by softer wholesale beef values and some preliminary cash prices that fell short of expectations, traders said.
They said sell stops and fund liquidation compounded market losses.
February live cattle closed 0.9 cent/lb. lower at 116.775 cents, and April 1.75 cents lower at 114.75 cents (all figures US$).
Both contracts fell below where their respective 10-day and 40-day moving averages converged at 116.974 and 115.557 cents.
Wednesday morning’s choice wholesale beef price slipped 15 cents/cwt to $189.81 from Tuesday. Select cuts fell $1.03 to $186.75, the U.S. Department of Agriculture said.
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On Wednesday, 3,600 animals at the Fed Cattle Exchange (FCE) on average brought $117.50/cwt versus last week’s $119 average. But the high end of the sales range there was $120.50.
After the futures market closed, slaughter-ready, or cash, cattle traded at $120/cwt in Kansas and Texas, up from $119 in the U.S. Plains a week ago.
The $120/cwt Plains trade is fairly consistent with the high end of FCE’s results, said CHS Hedging analyst Steve Wagner.
“The key is if somebody blinks and pays $120 in Nebraska because it was at the low end of the FCE range of $115,” he said.
Tight packer inventories stirred competition for supplies at a time when processors are grappling with extremely poor margins.
CME feeder cattle followed live cattle futures lower.
March feeders closed down 1.925 cents per pound at 122.3 cents.
Mostly weaker hog futures
Firmer cash and wholesale pork prices lifted CME February lean hogs to a fresh contract high, traders said.
But, they said, profit-taking and technical selling pressured other trading months.
February hogs, which will expire on Feb. 14, ended 0.975 cent/lb. higher at 73.35 cents, and hit a new contract high of 73.45 cents.
Most actively traded April closed 0.45 cent lower at 71.725 cents, and May finished down 0.275 cent to 75.725 cents.
Wednesday morning’s cash hog price in Iowa/Minnesota averaged $69.33/cwt, 62 cents higher than on Tuesday, USDA said.
Separate U.S. government data showed the average wholesale pork price, or cutout, up 31 cents/cwt to $85.69 from Tuesday, mostly led by $1.36 higher pork bellies.
The pork cutout was led by speculation regarding a bacon shortage, which is not the case given plentiful supplies, said CHS Hedging’s Wagner.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
