Chicago | Reuters – Live cattle futures on the Chicago Mercantile Exchange closed mostly lower on Friday on technical selling and lackluster cash cattle trade this week, traders said.
CME benchmark October live cattle settled down 0.375 cent at 128.125 cents per pound, and September feeder cattle futures ended down 0.475 cent at 163.075 cents per pound.
Market-ready cattle traded lightly in southern Plains cash markets at $121 per hundredweight (cwt) this week, below the value of the thinly traded August live cattle futures contract, which settled Friday at 122.750 cents per pound.
That trade created a risk of deliveries against futures, a bearish market signal, said Alan Brugler, president of Nebraska-based Brugler Marketing & Management. However, he noted that cash cattle traded higher in Nebraska, at $123 per cwt or more, a fact that underpinned August futures.
Supplies of market-ready cattle in feed lots were enough to meet the needs of beef packers for the time being, he said, even though wholesale beef prices have been rising.
“We know ready (cattle) numbers are going to decline in September, based on the (feed lot) placement patterns. But for now, we are still adequate,” Brugler said.
Hog futures closed narrowly mixed on Friday with the most-active October contract up 0.050 cent at 86.525 cents per pound, while December hogs rose 0.275 cent to settle at 80.175 cents.
Wholesale pork prices firmed, with the USDA reporting the U.S. pork cutout on Friday afternoon at $125.68 per cwt, its highest since Aug. 3. However, pork prices are poised to start their seasonal decline in September and October.
“You are getting to the end of the what is normally the high-priced window for the year,” Brugler said, adding, “We expect (pork prices) to go down … but the cutouts say, ‘not yet.'”