U.S. live cattle futures drifted lower on Monday in light Christmas Eve trading volume, analysts and traders said.
Chicago Mercantile Exchange livestock markets closed an hour earlier at noon CST, in observance of the Christmas holiday on Dec. 25.
There was not much fundamental information for investors to draw from with U.S. Department of Agriculture offices, which also were shutting down for the holiday.
Traders instead looked to last Friday’s USDA monthly cattle-on-feed report for inspiration.
"The November cattle placement figure was a little disappointing. But, the report still confirms tighter cattle supplies for 2013 which is bullish long term," said Oak Investment Group president Joe Ocrant.
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CME live cattle spot December closed off 0.1 cent per pound at 129.175 cents. Most actively traded February ended at 133.225 cents, down 0.35 cent (all figures US$).
Futures traders also pulled futures closer in line with last week’s cash cattle sales of $126 to $127, compared with $124 to $124.50 the week before.
Packers last week raised bids for slaughter-ready cattle while bolstering inventories during disruptions in production during the Christmas and New Year’s holidays.
Furthermore, wintry weather that crossed the northwestern U.S. Plains late last week dumped several inches of snow on parts of the region, slowing movement of animals to packing plants.
Recent strong wholesale beef values offset higher prices that packers paid for cattle, which helped stabilize their fallen margins.
HedgersEdge.com put the average beef packer margin for Monday at a negative $50.85 per head, compared with a negative $53.55 on Friday and a negative $28.50 on Dec. 17.
CME feeder cattle futures also fell, pressured by the weaker live cattle market and sell stops.
January closed 0.65 cent per lb lower at 151.5 cents. March was off 0.5 cents at 154.275 cents.
Pork prices, spreads lift hogs
CME hogs drew support from last Friday’s higher wholesale pork values as grocers prepared to feature product after the year-end holidays, a trader said.
February futures also benefited from spreads, he said, adding that colder weather will slow hogs weight gains and make them less available to packers.
The government showed U.S. hog weights nationally last week averaged 277 lbs., up one pound from the week before and during the same period a year earlier.
CME hogs February settled 0.65 cent/lb. higher at 87.55 cents. April ended up 0.025 cent at 91.65 cents.
— Theopolis Waters writes for Reuters from Chicago.
