U.S. livestock: CME live cattle lower as beef prices cool

Lean hogs close mostly lower

CME October 2021 live cattle (candlesticks) with 20-, 50- and 100-day moving averages (pink, brown and black lines). (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures fell on Thursday, on softening wholesale beef prices and a lack of supportive news, traders said.

CME October live cattle settled down 1.525 cents at 126.05 cents/lb. after hitting 125.875, near the contract’s 100-day moving average and its lowest price since Aug. 6 (all figures US$). The December contract ended down 1.4 cents at 132.2 cents.

CME feeder cattle futures tumbled, with most-active October down three cents at 165.05 cents/lb.

Trade in the cash cattle market has been slow so far this week, brokers said, leaving traders to worry about wholesale beef prices that have been retreating from 15-month highs set last week. Beef prices typically decline around Labour Day as the U.S. summer grilling season winds down.

“There is a big concern that the beef has topped out,” said Dan Norcini, an independent livestock trader.

“That has people thinking the packers will try to preserve their margins” by paying lower prices in the cash market for fat cattle, he said.

Choice cuts of boxed beef fell by 53 cents, to $337.92 per hundredweight (cwt), on Thursday afternoon and select cuts dropped by $2.60, to $304.97/cwt, according to the U.S. Department of Agriculture (USDA).

Fund-driven selling may have pressured markets as well. Commodity funds hold a net long position in CME live cattle futures, leaving the market prone to bouts of long liquidation.

Lean hog futures closed mostly lower, with the CME October contract settling down 0.3 cent at 89.85 cents/lb. December hogs fell 0.15 cent to end at 82.325 cents.

USDA reported export sales of U.S. pork in the week ended Aug. 26 at 33,500 tonnes, up 38 per cent from the prior four-week average. Weekly beef export sales totaled 15,600 tonnes, up 24 per cent from the prior four-week average.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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