U.S. livestock: CME live cattle losses mount in fund selloff

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures finished lower for a fourth straight session on Thursday, saddled by fund liquidation after slipping below technical support levels, traders said.

August live cattle ended 1.175 cents/lb. lower at 113.575 cents (all figures US$). October closed 1.825 cents lower at 110.575 cents and below the 40-day moving average of 112.36 cents.

Futures were unable to hold onto early-session gains despite their sizeable discounts to preliminary cash prices.

So far this week, market-ready, or cash, cattle in the U.S. Plains moved at $116-$118/cwt, compared with $118-$119 a week ago, said feedlot sources.

Investors lacked confidence that processors would pay more for unsold cattle than last week, based on futures’ recent losing streak and more animals for sale.

Furthermore, packers were also having difficulty convincing grocers to buy significant amounts of beef at higher costs for Labour Day grilling demand when there is plenty of pork and chicken available.

The morning’s choice beef price dropped 83 cents/cwt from Wednesday to $200.92. Select cuts were $1.55 higher at $194.68, the U.S. Department of Agriculture said.

Market participants adjusted positions in advance of USDA’s monthly Cattle-On-Feed report on Friday.

Technical selling and live cattle futures’ retreat pulled down CME feeder cattle contracts. August feeders closed 1.7 cents/lb. lower at 145.025 cents.

Softer hog market settlement

Profit-taking and lower cash and wholesale pork prices weighed on CME lean hogs, said traders.

October ended down 0.3 cent/lb., to 60.7 cents, and December finished 0.3 cent lower at 56.45.

“My guess is we’re going to taper off and close very poor tomorrow because I don’t see anything that’s stacking up very positive at all,” said Archer Financial Services broker Dennis Smith.

Thursday morning’s wholesale pork price, or cutout, dropped $1.46/cwt to $72.90 from Wednesday, with reduced prices for all categories except ribs, USDA said.

The government reported Thursday morning’s average cash hog price in Iowa/Minnesota sagged 99 cents/cwt from Wednesday, to $64.18, in light sales volume.

Abundant supplies have given some packers all the hogs they need for what is expected to be a potential 140,000-plus Saturday hog slaughter, a trader said.

He said increased hog numbers and large amounts of pork in storage periodically pressured wholesale pork values.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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