Chicago | Reuters — Chicago Mercantile Exchange live cattle futures weakened on Friday as the market retreated from contract highs hit this week.
Profit-taking weighed on futures prices, though the market remains supported by strong demand for cattle from meatpackers, traders said.
Packers such as Tyson Foods and JBS slaughtered an estimated 120,000 cattle on Friday, up 5.3 per cent from a week ago and 12.1 per cent from a year ago, the U.S. Department of Agriculture said.
“We’ve rallied here for a couple weeks now,” a commodities broker said. “Really the strength comes from the increased slaughter pace.”
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
April live cattle ended 0.7 cents lower at 146.175 cents/lb., after rising on Thursday to a contract high of 148.7 cents (all figures US$). March feeder cattle closed 0.5 cent lower at 166.225 cents/lb.
Beef processors’ profit margins were $268.60 per head of cattle, compared to $298.45 per head on Thursday and $371.75 per head a week ago, said Denver-based livestock marketing advisory service HedgersEdge.com LLC.
“They’re going to kill as many as they possibly can with those type of margins,” the broker said.
Choice cuts of boxed beef fell by 30 cents, to $274.52/cwt, while select cuts dropped by $1.12, to $267.83/cwt, USDA said.
In the pork market, wholesale cutout values jumped, with the carcass value up by $8.48 per hundredweight, USDA said.
Still, CME April lean hog futures pulled back to settle 1.2 cents lower at 102.225 cents/lb. The contract on Thursday set a contract high of 107.7.
In other livestock news, U.S. poultry producers are tightening safety measures for their flocks as disease experts warn that wild birds are likely spreading a highly lethal form of avian flu across the country.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
