Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures on Friday finished in negative territory for a third day in a row after weak wholesale beef values erased initial short-covering gains, traders said.
Spot December closed 1.425 cents lower at 124.275 cents/lb., and marked a new contract low of 123.875 cents (all figures US$). February ended down 0.225 cent, to 129.225 cents.
Friday morning’s wholesale choice beef price slumped $1.12/cwt from Thursday, to $203.37. Select cuts shed 40 cents, to $192.62, based on U.S. Department of Agriculture data.
“We’ve not seen it yet, but beef normally attracts more interest from shoppers beginning in late fall after they’ve had their fill of turkey over Thanksgiving,” a trader said.
Tepid wholesale beef demand comes amid disappointing prices for market-ready (cash) cattle.
This week, cash cattle in the U.S. Plains brought mostly $124 to $126/cwt, compared to $126-$127 a week earlier, feedlots sources said.
The recent drop in futures prices, negative packer margins and more cattle for sale this week kept a lid on cash prices, traders and analysts said.
December futures led losses as investors sold that contract ahead of potential deliveries on Monday and in advance of its expiration on Dec. 31.
CME Group plans to change to its rules for live cattle futures by requiring that all cattle delivered against the contract must be born and raised only in the U.S.
Lower live cattle futures weakened CME feeder cattle contracts, with January ending down 0.3 cent/lb., to 159.45.
Uneven hog futures settlement
The morning’s lower cash and wholesale pork prices pulled the December CME lean hog contract lower, traders said.
They added that investors simultaneously bought February and sold December before it expires on Dec. 14.
Spot December finished 1.3 cent lower at 57.05 cents/lb., and February closed up 0.275 cent, to 59.1 cents.
Government data showed Friday morning’s average cash hog price in the western Midwest sagged $1.03/cwt from Thursday, to $52.64.
Friday morning’s wholesale pork price of $73.23/cwt fell 85 cents from Thursday, with cost declines for all categories except butts and ham, the USDA said.
Packer inventories are almost full through early week, including a USDA-estimated 241,000 head Saturday kill, traders and analysts said.
They said wholesalers are only purchasing pork for immediate needs, with Christmas hams of primary interest to consumers.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.