U.S. livestock: Lower cash prices sink CME live cattle

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures fell hard Friday, pressured by lower prices for market-ready (cash) cattle, traders said.

June closed 2.775 cents per pound lower, at 152.45 cents, and August down 2.125 cents, to 150.8 cents (all figures US$).

A moderate number of cash cattle in Nebraska sold at $152 on Friday, $3 to $4 lower than last week, feedlot sources said. Thursday’s small-volume cash trade in Kansas was $155, which was par with a week ago, they said.

Tight supplies forced packers to push back against higher cash bids by cutting plant hours, which bettered their margins and at times stirred wholesale beef demand.

Fewer cattle are available partly because ranchers are holding back heifers to rebuild the U.S. herd after years of drought hurt crops, University of Missouri livestock economist Ron Plain said.

Friday morning’s wholesale choice beef price dipped five cents per hundredweight (cwt) from Thursday to $247.14. Select cuts rose 64 cents to $241.30, the U.S. Department of Agriculture said.

Beef packer margins for Friday were at a negative $16.90 per head, compared with a negative $21 per head on Thursday and a negative $71.50 a week ago, as calculated by HedgersEdge.com.

Fund selling surfaced after June and August fell below their respective 20-day moving averages of 152.96 and 151.38 cents.

Sell stops, live cattle market losses and technical selling took down CME feeder cattle contracts.

August ended 2.8 cents/lb. lower at 223.45 cents.

Hogs lower after June expiration

CME lean hogs closed lower, responding to softer cash hog and wholesale pork values, traders said.

The June contract, which expired at noon CT, settled nearly in line with CME’s hog index for June 10 at 81.91 cents.

June closed up 0.075 cent/lb. at 81.45 cents, July 1.125 cents lower at 78.05 and August down 1.8 cents, to 76.725 cents.

USDA reported Friday morning’s average cash hog price in Iowa/Minnesota had fallen 79 cents/cwt from Thursday, to $77.51.

Government data quoted the morning’s wholesale pork price at $85.02/cwt, $1.48 lower than on Thursday.

Larger-than-expected production afforded packers enough hogs for early next week and grocers enough pork without having to compete for it, an analyst said.

Futures are now underpriced to the exchange hog index, which may stir short-covering on Monday, but some traders are still apprehensive about possibly more supply increases ahead, he said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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