Chicago | Reuters –– Chicago Mercantile Exchange live cattle closed moderately lower Friday on profit-taking and in response to the U.S. Department of Agriculture’s monthly Cattle on Feed report earlier in the day, traders said.
The number of cattle put into U.S. feedlots in April unexpectedly slowed compared with the same month last year.
“It’s a bullish report but not enough to get everyone excited on a Friday before a three-day weekend,” said University of Missouri economist Ron Plain.
Investors said the report, coupled with lower wholesale beef prices, stirred bear spreads that consisted of traders who sold nearby contracts and simultaneously bought deferred months.
Friday afternoon’s choice wholesale beef price slid $1.97 per hundredweight (cwt) from Thursday to $260.25 (all figures US$). Select cuts fell $1.70, to $247.62, USDA said.
The government’s monthly cold storage report on Friday showed total beef stocks in April at 476.7 million lbs., down one per cent from March, but up 18 per cent from a year earlier.
Market participants look forward to cash trade next week, when packers buy supplies for the first full week of production after the U.S. Memorial Day weekend.
This week, market-ready (cash) cattle in the U.S. Plains traded mostly $159-$161/cwt, steady to down $2 from last week, feedlot sources said.
June closed 0.25 cent/lb. lower at 152.125 cents, and August fell 0.2 cent, to 150.7 cents.
CME feeder cattle drew support from lower corn prices and firm back-month live cattle futures.
August ended up 1.275 cents at 219 cents; September was 1.175 cents higher at 218 cents.
Fundamentals weaken hog futures
Softer cash and wholesale pork values pressured CME lean hogs, traders said.
June closed down 0.05 cent/lb. at 83.725 cents, and July 0.125 cent lower at 83.725 cents.
Friday afternoon’s average cash hog price in Iowa/Minnesota dropped 68 cents/cwt from Thursday to $78.72, the USDA said.
Separate government data quoted the afternoon’s wholesale pork price at $85.58/cwt, $1.47 lower than on Thursday.
Packing plant closings over the Memorial Day holiday limited the need for hogs, traders and analysts said.
Supermarkets are not expected to purchase more meat until they assess how much moved over the holiday weekend, they said.
Friday’s USDA cold storage report showed total April pork inventories at 699.6 million lbs., up four per cent from the previous month and up 20 per cent from a year earlier.
— Theopolis Waters reports on livestock markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago.