U.S. livestock: CME live cattle plunge limit down

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Tuesday slumped, with nearby contracts down the three cents/lb. daily price limit, rattled by fund selling and uneasiness before cash prices by Friday, said traders.

October and December settled down by the three-cent limit to 103.825 and 103.125 cents, respectively (all figures US$). Live cattle’s trading limit will be expanded to 4.5 cents on Wednesday.

Packers on Tuesday bid $104/cwt for slaughter-ready, or cash, cattle in Texas and Kansas that were priced at $110, said feedlot sources. Last week, cash cattle fetched roughly $105/cwt.

Futures’ two-day slide and 30,000 more cattle for sale than last week may work against cash prices, said analysts and traders. They said some packers might soon cut slaughter rates to maintain their substantial margins and stimulate wholesale beef demand.

“Wholesale beef buying will likely be minimal with this being the last week of the month and October National Pork Month is on the horizon,” said Doane Advisory Services economist Dan Vaught.

Tuesday morning’s choice beef price jumped $1.74/cwt from Monday, to $188.78. Select cuts rose 47 cents, to $180.12, the U.S. Department of Agriculture said.

Average beef packer margins for Tuesday were a positive $85.05 per head, up from a positive $55.50 on Monday, as calculated by HedgersEdge.com.

CME live cattle futures’ selloff and $5-$8/cwt lower cash feeder cattle prices sank the exchange’s feeder cattle market.

Most-actively traded October closed 4.2 cents/lb. lower at 126.85 cents. November settled down by the 4.5-cent per pound daily price limit to 123.375 cents.

Hog market repeats 10-month low

Bearish market fundamentals and active CME live cattle market selling pressed the exchange’s lean hog contracts to a 10-month low for a second straight day, traders said.

October closed 1.35 cents per pound lower at 51.7 cents, and posted a fresh contract low of 51.500 cents. December ended down 2.150 cents to 46.450 cents and made a new low of 46.275 cents.

Tuesday morning cash prices in the U.S. Midwest were steady to $1/cwt lower as supplies grow seasonally, said regional hog merchants.

They said pork cut values retreated after most grocers bought all they need for October Pork Month.

Tuesday morning’s USDA data showed the wholesale pork price fell $1.04/cwt from Monday to $77.57.

Investors await USDA’s quarterly hog report on Friday at 2 p.m. CT.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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