Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts landed in modestly bearish territory on Friday amid pre-weekend consolidation after investors digested this week’s cash prices, said traders.
“The market is priced right with this week’s cash. We’ll wait until next week to see if packers are short on supplies or need cattle,” said Vetterkind Cattle Brokerage president Troy Vetterkind.
October live cattle finished up 0.475 cent/lb. to 112.825 cents. December closed 0.15 cent lower at 117.125 cents, and February ended down 0.125 cent at 121.075 cents.
Packers in the U.S. Plains this week paid roughly $111/cwt for slaughter-ready, or cash, cattle that a week earlier brought $108 to $109, said feedlot sources.
Tight supplies in parts of the Plains were enough to force some packers to bid up for animals, a trader said. But, at least one major processor is thought to have enough inventory through the rest of the month, he said.
Still impressive, but slipping, beef packer margins and talk that supermarkets are preparing to advertise beef in early November offered underlying cash price support, analysts and traders said.
But some market participants are taking a wait-and-see attitude regarding beef demand given increased cattle numbers ahead and this week’s U.S. beef export slippage.
Short-covering, technical buying and this week’s sharply higher cash feeder cattle prices pared some of Thursday’s CME feeder cattle losses.
October ended 0.5 cent/lb. higher at 154.05 cents.
Hog futures rise after October expires
Bargain hunting and fund buying lifted deferred CME lean hogs, while October lagged prior to its expiration at noon CT, said traders.
October settled down 0.3 cent/lb. at 60.4, and nearly inline with CME’s hog index for Oct. 11 at 59.12 cents.
Most actively traded December finished up 0.575 cent to 62.2 cents, and February closed 0.625 cent higher at 67.45 cents.
Both contracts ended above their respective 10-day moving average of 61.788 and 67.215 cents.
Uneasiness about cash prices and pork demand heading into the second half of October Pork Month, along with futures’ premiums to the exchange’s index, capped market gains, traders and analysts said.
Nonetheless, expectations for fewer hogs beginning late this year provided support, they said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.