U.S. livestock: CME live cattle, hogs retreat before holiday

Chicago | Reuters — Chicago Mercantile Exchange live cattle slumped on Friday before the Labour Day holiday, due to lower prices for market-ready (cash) cattle, traders said.

CME live cattle were further weakened by Wall Street’s tumble on uncertainty whether the Federal Reserve will raise rates by mid-September.

October live cattle ended down 1.125 cents/lb. at 140.475 cents, and December 1.1 cents lower at 142.775 cents (all figures US$).

“Futures were partially being pressured by the stock market, which indirectly influenced the cash cattle trade,” said Oak Investment Group president Joe Ocrant.

This week, cash cattle in Kansas and Texas sold at $143/cwt and $142-$143 in Nebraska, down from $144-$147 in the U.S. Plains last week, feedlot sources said.

Seasonal tepid wholesale beef demand and plant closures for at least one day during the three-day holiday weekend curbed packer spending for cattle.

The morning’s wholesale choice beef price slipped 18 cents, to $240.63/cwt, from Thursday. Select cuts rose 71 cents, to $229.15, the U.S. Department of Agriculture said.

CME live cattle futures investors await the first of five days of the Standard & Poor’s Goldman Sachs Commodity Index (SP+GSCI) roll on Tuesday.

The SP+GSCI roll consists of funds selling, or rolling, their October long positions and simultaneously buying the December contract.

Technical selling and live cattle futures losses weighed on CME feeder cattle, with September closing 1.2 cents/lb. lower at 201.35.

Hog futures sag

Deteriorating cash prices and soft wholesale pork values dragged on CME lean hogs, traders said.

Spot October closed down 0.3 cent/lb. to 69.15 cents, and December 0.675 cent lower at 63.35.

Friday morning’s wholesale pork price at $85/cwt, slipped 25 cents from Thursday, following $5.18 lower costs for pork bellies that are processed into bacon.

USDA quoted Friday morning’s average Iowa/Minnesota cash price down 65 cents/cwt from Thursday to $69.97.

Overall bacon demand remains solid, but Labour Day usually signals the end of the BLT sandwich season, traders and analsyts said.

Packers might raise hog bids sometime next week to make sure they have enough for an expected huge post-Labour Day Saturday slaughter, they said.

Investors are cautious about buying October lean hogs that is nearly inline with Iowa/Minnesota cash prices, even though futures are still at bullish discounts to CME’s latest hog index at 76.39 cents.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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