U.S. cattle futures sag before USDA report

 Chicago Mercantile Exchange live cattle sagged Friday as investors awaited the U.S. Department of Agriculture’s monthly cattle-on-feed report on Friday at 2 p.m. CDT.

Analysts expect the data to show cattle placements last month fell as abundant grazing pastures kept animals out of feedyards longer.

USDA’s monthly cold storage report will be issued on Monday at 2 p.m. and will include June total beef and pork inventories.

Initial steady cash cattle prices disappointed futures buyers. They contend packers need cattle after buying less in recent weeks.

Cash cattle in Texas and Kansas lightly traded at $119 per hundredweight (cwt), steady with a week ago, feedlot sources said. They said cattle sellers in both states are holding out for more money.

No live-basis cattle sales were reported by feedlot sources in Nebraska where packers bid $119 versus asking prices of mostly $122. Cattle there last week fetched mostly $120.

The government on Friday morning quoted the wholesale price of choice beef at $189.51 per cwt, which was up 21 cents from Thursday. Select cuts rose 59 cents to $184.32 cents.

Some grocers may be buying beef, hoping cooler weather next week will restore grilling, hurt by scorching temperatures, a trader said.

In after-hours trading, CME live cattle were poised to end up marginally for the week.

Pit-traded August live cattle finished at 121.975 cents, or down 0.125 cent per lb and October closed at
126.225 cents, or 0.250 cents lower.

Buy stops quietly nudged CME feeder cattle to a six-month high. The market is aiming for a weekly per centage gain of more than 1.0 per cent.

August CME feeder cattle closed at 152.250 cents, up
0.175 cent per lb and September at 155.250 cents, or
0.200 cent higher.

HOGS SAG ON CASH

Lower cash hog prices and weaker wholesale pork values stirred CME hog futures selling, analysts and traders said.

They said packers cut cash hog bids amid waning operating margins and tepid pork demand – particularly for grilling cuts.

Government data showed the average hog price on Friday morning in the most-watched Iowa/Minnesota market at $97.64 per hundredweight (cwt), $1.31 lower than Thursday.

Friday morning’s USDA mandatory wholesale pork price report, or cutout, calculated on a plant-delivered basis, was at $99.79 per cwt, down 22 cents from Thursday.

HedgersEdge.com calculated U.S. pork packer margins on Friday at a negative $5.00 per head, compared with a negative $1.95 on Thursday and negative $1.25 a week earlier.

Profit taking pressed CME October hogs below the 20-day moving average of 85.131 cents, which triggered fund selling.

CME hogs are set to end nearly 6.0 per cent lower for the week, the biggest weekly drop since the week ending August 17, 2012.

This week’s decline was attributed to August futures’ sizable discount to the July contract that expired on Monday at
102.300 cents.

On Friday, August closed at 96.475 cent per lb, down 0.150 cent and October at 84.975 cents or 0.650 cent lower.

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