U.S. livestock: CME live cattle plunge limit down as cash prices fall

Chicago | Reuters –– Chicago Mercantile Exchange live cattle fell by the three-cent-per-pound price limit Friday on profit-taking and lower cash prices, traders said.

April and June closed at 157.8 cents and 149 cents, respectively (all figures US$). CME’s live cattle trading limit will be expanded to 4.5 cents on Monday following futures’ limit-down settlement on Friday.

Market-ready (cash) cattle in Kansas and Texas moved at $160-$161 per hundredweight (cwt), $2-$3 lower than earlier this week and down $2 from last week, said industry sources.

This week’s overall cash trade in the U.S. Plains was generally $160-$163/cwt, compared with $163-$165.50 last week, they said.

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Packers kept a lid on cash prices by trimming kills and periodically raising wholesale beef costs, which improved their margins.

“Until you see the true expression of the seasonal increase in beef demand I don’t really know that the market can really catch in a significant way,” said Cassandra Fish, author of industry blog The Beef.

Friday morning’s choice wholesale beef price dropped $2.69 cents/cwt from Thursday, to $257.69. Select cuts were up 48 cents, to $251.45, the U.S. Department of Agriculture (USDA) said.

The day’s beef packer margins were a positive $10.55 per head, compared with a positive $10.70 on Thursday and a negative $35.70 last week, according to HedgersEdge.com.

June and August losses mounted after they drifted beneath the 100-day moving average of 149.75 cents and 147.71 cents, which ignited fund liquidation.

CME feeder cattle were pressured by technical selling, sell stops and live cattle futures’ tumble.

April closed 2.8 cents/lb. lower at 213 cents, and May down 4.475 cents to 208.525 cents.

Weaker hogs contracts

CME lean hogs closed moderately lower, weighed on by softer cash prices as processors worked to protect their slim margins, traders said.

May closed 0.5 cent/lb. lower at 70.525 cents, and June down 0.1 cent, to 76.275 cents.

The morning’s cash prices for hogs in the western Midwest sagged $1.36/cwt to $61.37 from Thursday, based on USDA data.

HedgersEdge.com calculated the day’s pork packer margins at a positive 75 cents per head, compared with a positive $1.85 on Thursday.

CME lean hogs’ premiums to current cash prices and CME’s hog index for April 15 at 62.98 cents kept futures on the defensive, traders and analysts said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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