Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts on Thursday posted modest losses after a volatile session, as investors waited for cattle in the U.S. Plains to change hands, traders said.
February futures drew support from wintry weather across the western Corn Belt that threatens to disrupt livestock production.
February live cattle closed up 0.175 cent/lb. at 125.775 cents (all figures US$). April ended down 0.25 cent at 123.725 cents, and June finished down 0.2 cent at 115.525 cents.
Packer bids for market-ready, or cash, cattle in the Plains stand at $124/cwt against $129-$130 seller offers. On Wednesday a few animals at the Fed Cattle Exchange auction sold for $126.
Last week, Plains cash cattle brought $125-$126/cwt.
Market bears are skeptical that packers will pay more for supplies while trying to conserve margins that remain profitable but down from earlier this year.
Bullish investors expect steady to firmer cash returns based on lighter animal weights, the result of fringed temperatures that tends to slow weight gains in livestock.
“I think packers are going to compete for numbers this week, they’re just waiting. They know they’re going to have to buy some cattle, so they’re not going to push early in the week,” Hales Trading Co. president David Hales said.
On Thursday, the U.S. Department of Agriculture’s export sales data showed U.S. beef for the week ended Feb. 1 totaled 18,500 tonnes for the current marketing year, down from 25,200 tonnes in the previous week.
Technical selling and weaker CME live cattle futures weighed on the exchange’s feeder cattle contracts.
March feeders ended 1.05 cents/lb. lower at 147.25 cents.
Hog futures close mixed
CME February lean hogs, which will expire on Feb. 14, ended lower after investors sold that contract and simultaneously bought under-valued April futures, traders said.
They said lower prices for wholesale pork and slaughter-ready, or cash, hogs further discouraged February futures buyers.
February hogs closed 0.45 cent/lb. lower at 73.4 cents. Most-active April finished up 0.225 cent at 69.45 cents.
Rough weather in the Midwest will force some packers to compete for hogs while faced with their single-digit profits, a trader said.
USDA’s export sales report put U.S. pork exports for the latest week at 12,700 tonnes, down from 27,300 in the prior week.
— Reporting for Reuters by Theopolis Waters in Chicago.