Chicago | Reuters — A selloff of Chicago Mercantile Exchange live cattle futures carried over into the third straight session on Friday, pressured by diminished seasonal beef demand and sentiment that cash prices may have topped out, traders said.
August closed down one cent per pound at 147.475 cents, and October fell 1.375 cents, to 150.425 cents.
“Live cattle was down one cent because cash will probably be lower next week with boxed beef falling out of bed,” said Vetterkind Cattle Brokerage president Troy Vetterkind.
Packers may trim slaughters to realign their negative profit margins and improve cutout values, he said.
This week, market-ready (cash) cattle in the U.S. Plains brought $150 to $151/cwt versus the bulk of last week’s sales at $148 to $152, according to feedlot sources.
Friday morning’s wholesale choice, or boxed, beef price eased 69 cents/cwt from Thursday, to $239.03. Select cuts slipped 54 cents, to $236.04, the U.S. Department of Agriculture said.
Beef packer margins for Friday were at a negative $24.70 per head, compared with a positive $1 on Thursday, as calculated by HedgersEdge.com.
August and October drifted below their respective 100-day moving averages of 148.32 cents and 150.47 cents, which triggered fund liquidation and sell stops.
CME August feeder cattle closed down 0.5 cent/lb. to 211.25 cents on live cattle market selling and higher corn prices that reversed initial short-covering futures gains.
Pricier corn could raise input costs for feedlot operators.
Chicago Board of Trade corn spiked to a one-year high on USDA’s bullish grain report.
Steady to firm hog close
CME lean hogs settled steady to moderately higher after investors bought nearby contracts and sold deferred months, stirred by opposing supply scenarios, traders said.
July, which will expire on July 15, ended up 0.25 cent/lb. at 78.975 cents; August, 0.375 cent higher at 73.65 cents; and October, unchanged at 62.45 cents.
Overall hog and pork production continues to outpace last year’s levels, which pressured the morning’s cash and wholesale pork prices, a trader said.
However, current supplies remain tighter than forecasts for plentiful hogs through the rest of 2015, he said.
On average, a small number of cash hogs in Iowa/Minnesota on Friday morning traded at $76.63/cwt, $1.65 lower than on Thursday, the USDA said.
Separate government data showed Friday morning’s wholesale pork price at $80.80/cwt, down 47 cents from Thursday.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.