U.S. livestock: Lower cash prices sink CME live cattle for 3rd straight day

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Chicago/Reuters – Chicago Mercantile Exchange live cattle futures slid for a third day in a row on Thursday, hitting 13-month lows in those sessions, following preliminary cash price weakness, traders said.

August closed 1.150 cents per lb lower at 143.350 cents, and October was down 1.800 cents at 144.650 cents.

On Thursday, market-ready, or cash, cattle in Kansas and Texas sold at $145 per cwt, down $3 from last week, feedlot sources said.

“We’re getting close to when futures and product start to bottom out seasonally, with all eyes on Labor Day grilling demand,” a trader said.

Until then, packers have curtailed operating hours to control cash spending, recover lost margins and push up wholesale beef cutout values, he said.

Thursday morning’s wholesale choice beef price, or cutout, was at $233.41 per cwt, up 49 cents from on Wednesday. Select cuts gained 20 cents to $228.55, the U.S. Department of Agriculture said.

Beef packer margins for Thursday were at a negative $63.60 per head, compared with a negative $61.95 on Wednesday, as calculated by HedgersEdge.com.

Investors await USDA’s monthly Cattle-On-Feed report on Friday at 2 p.m. CDT (1900 GMT).

On Friday, the government will simultaneously issue semi-annual cattle inventory data.

CME live cattle losses and sell stops sent feeder cattle contracts sharply lower.

The exchange’s feeder cattle index for July 22 was at 216.81 cents, down from 217.14 cents for July 21, reflecting softer cash feeder cattle prices.

August closed down 2.600 cents per lb at 209.775 cents.

Soft CME hogs settlement

Profit-taking, technical selling and spillover from slumping cattle markets at times weighed on CME lean hogs, traders said.

August ended down 0.250 cent per lb at 78.275 cents, below the 100-day moving average of 78.62 cents. October was 0.700 cent per lb lower at 64.700 cents.

Speculation that tight near-term hog numbers may at times underpin cash and wholesale pork prices provided underlying futures support.

On Thursday morning, cash hogs in the Midwest traded in line with Wednesday’s prices, hog dealers said.

The morning’s wholesale pork price was at $84.24 per cwt, up 25 cents from Wednesday.

Futures were further pressured by plentiful hog supplies and Wednesday’s USDA cold storage report that showed record-high June pork stocks at 632.2 million lbs, traders and analysts said.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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