Chicago/Reuters – Chicago Mercantile Exchange live cattle sank to a 13-month low for a second straight session on Wednesday as wholesale beef demand continued to flounder seasonally, traders said.
August closed 0.650 cent per lb lower at 144.500 cents, and October down 0.825 cent at 146.450 cents.
Wednesday morning’s wholesale choice beef price, or cutout, was at $232.86 per cwt, down 46 cents from on Tuesday. Select cuts dropped $1.27 to $228.74. the U.S. Department of Agriculture said.
“This beef demand deal is pretty dicey right now, but it is the dog days of summer,” said John Nalivka, president of Sterling Marketing Inc.
Fallen beef cutout values have trimmed margins for packers, possibly discouraging them from spending more for market-ready, or cash, cattle than last week.
Cash cattle bids across the U.S. Plains were mostly at $145 per cwt versus $150 asking prices in Texas and Kansas, feedlot sources said. Last week, cash cattle moved at $148.
The USDA will issue the monthly cold storage report at 2 p.m. CDT (1900 GMT) that will include June beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 454.2 mln lbs, and pork stocks at 606.2 mln lbs.
CME live cattle losses and lower cash feeder cattle prices dropped feeder cattle futures.
August closed 0.700 cent per lb lower at 212.375 cents.
Fund buying help rally CME hogs
CME lean hogs finished sharply higher, with October up the 3.000-cents per lb daily price limit, on buy stops and fund buying after contracts earlier broke through technical resistance barriers, traders said.
August ended 2.650 cents per lb higher at 78.525 cents, and below the 100-day moving average of 78.64 cents. October closed limit-up at 65.400 cents, and above the 20-day moving average of 64.21 cents.
Tuesday’s wholesale pork price spike and reduced hog weights, which some traders believe may soon underpin cash prices, sparked initial CME hog futures buying, the traders said.
But, Wednesday morning’s lower pork cutout values and slumping cash prices continued to reflect plentiful supplies, they said.
Government data showed the morning’s wholesale pork price at $83.51 per cwt, down $1.56 from Tuesday.
USDA reported Wednesday morning’s average cash hog price in Iowa/Minnesota sank $2.27 per cwt in light volume from Tuesday to $72.23.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.