U.S. livestock: CME live cattle sink to three-year bottom

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Thursday slid to their lowest level in three years, pressured by more losses price-wise for unsold cash cattle, traders said.

Spot December ended down 2.825 cents/lb. to 117.15 cents, and made a new contract low of 116.975 (all figures US$). February finished 2.45 cents lower at 122.525, after posting a fresh low of 121.975 cents.

On Thursday morning, market-ready (cash) cattle in Nebraska sold at $115 to $117/cwt, down $2 to $4 from a week there, said feedlot sources.

Earlier this week, Texas and Kansas cash cattle brought $117 to $118/cwt, $1 to $2 lower than the week before, according to the feedlot sources.

Processors pushed back against raising cash bids ahead of reduced plant operations over the Christmas and New Year’s holidays.

Lacklustre wholesale beef demand, more cattle for sale and futures’ drop this week by more than three per cent further weighed on cash returns.

Thursday morning’s wholesale choice beef price shed 56 cents/cwt from Wednesday, to $196.34. Select cuts were up 30 cents, to $185.21, based on U.S. Department of Agriculture data.

Short-covering and bargain hunting at times lifted CME live cattle contracts from session lows.

Some investors adjusted positions ahead of USDA’s monthly Cattle-On-Feed report on Friday.

Live cattle futures’ selloff dropped CME feeder cattle to a two-year low for a fourth consecutive session.

January feeders finished 3.45 cents/lb. lower at 144.25, and marked a new low of 143.2 cents.

Lower hog market settlement

CME lean hogs slumped after plentiful supplies, as packers prepare for the Christmas holiday-shortened work week, pulled cash and wholesale pork prices lower, traders said.

Spot February closed 2.125 cents/lb. lower at 55.775 cents, and April down 2.2 cents, to 61.525 cents.

USDA quoted Thursday morning’s average cash hog price in Iowa/Minnesota at $50.83/cwt, down 48 cents from Wednesday.

The morning’s wholesale pork price declined 49 cents from Wednesday, to $72.77, led by $6.11 lower pork belly values, USDA said.

Because beef is a competing meat, long liquidation in the exchange’s live cattle market spilled over into the hog sector.

“Cattle is kind of depressing. It keeps going down like there’s nothing stopping it,” said an Ohio dealer.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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