U.S. livestock: CME live cattle jump with beef prices

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures settled higher on Monday, fueled by the rebound in wholesale beef prices that helped erase Friday’s market losses, traders said.

October closed 1.3 cents per pound higher at 169.55 cents, and December was 0.925 cents higher at 167.825 cents (all figures US$).

Monday morning’s choice wholesale beef price rose $1.64 per hundredweight (cwt) from Friday to $249.05. Select climbed $2.94 to $235.65, the U.S. Department of Agriculture said.

The problem for futures was wholesale beef demand got “crushed” last Friday, said AgriVisor senior market analyst Dale Durchholz.

Beef sales typically slip this time of year as retailers focus on hams and turkeys for the winter holidays, he said.

Packers may try to cut slaughter rates to cushion their falling margins and offset high-priced cattle, another trader said.

Last week, market-ready, or cash, cattle in the U.S. Plains fetched mostly $170/cwt, which bested the previous record of $166 set in set July.

Beef packer margins for Monday were negative $129.10 per head, compared with negative $76.50 on Friday and negative $71.50 a week earlier, according to HedgersEdge.com, the Colorado-based analytics firm.

Newly reduced CME electronic live cattle, feeder cattle and lean hogs trading hours go into effect later Monday.

Effective Dec. 15, CME plans to begin blended pit and electronic livestock market settlement prices.

CME feeder cattle futures drew support from live cattle market buying and short-covering.

Sharply higher corn prices limited feeder cattle contract advances.

October closed 0.425 cent/lb. higher at 238.325 cents, and November was at 234.8 cents, up 0.15 cent.

Hogs turn lower

CME lean hogs posted losses in anticipation of continued lower cash prices as supplies expand seasonally, traders said.

December finished 1.2 cents/lb. lower at 89.05 cents, and February was down 0.65 cent, to 88.225 cents.

USDA’s Monday morning direct cash hog prices were unavailable. Hogs in the Midwest traded as much as $3/cwt lower, according to regional hog dealers.

On Monday, packers processed 432,000 hogs, their biggest one-day kill since 435,000 on Feb. 3, based on USDA data.

Daily kills close to last year’s levels suggested farmers are moving hogs ahead of time to avoid lower prices, a trader said. And, cooler fall temperatures and cheaper corn is allowing hogs to put on weight quicker, he said.

Investors are watching to see how well the pork cutout holds up, given increased tonnage while possibly supported by shoppers eyeing pork rather than high-priced beef.

U.S. government data showed Monday morning’s wholesale pork price, or cutout, was up $2.84/cwt from Friday to $101.09, lifted by the $10.18/cwt surge in costs for picnic shoulder cuts.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer.

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