U.S. livestock: Profit-taking trims CME live cattle gains

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle closed lower on Wednesday, after profit-taking and cash price uncertainty turned back initial advances, traders said.

Spot-October closed 0.5 cent/lb. lower at 142.975 cents, and December dropped 0.7 cent to 145.075 (all figures US$).

Packers have not bid for market-ready (cash) cattle priced at $146/cwt in Texas and Kansas, feedlot sources said. Last week, cash cattle in the U.S. Plains moved at $142 to $143.50.

Firm beef cutout values, impressive packer margins and processors buying for the first full slaughter week after Labour Day are supportive cash price influences, traders said.

But packers prefer to control spending for cattle that have grown heavier as producers hold them back while negotiating for better prices.

“People who have gotten used to getting $150 to $160 cattle can’t stand it when prices are closer to $130,” a Midwest feedlot manager said.

The longer sellers hold cattle, the more some packers penalize them for heavier animals, he said.

Wednesday morning’s wholesale choice beef price was up 33 cents, to $239.49/cwt, from Tuesday. Select cuts rose 71 cents, to $229.36, the U.S. Department of Agriculture said.

U.S. stocks’ slide from session highs discouraged would-be CME live cattle futures buyers.

Funds trading CME’s livestock markets shifted October long positions into deferred months in a procedure known as the “roll” by followers of the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI).

Wednesday was the second of five days for the S+PGSCI roll process.

Profit-taking and live cattle futures losses pressured CME feeder cattle. September closed 0.475 cent lower at 203.825.

October hogs up, others down

CME October lean hogs were supported by higher wholesale pork prices as supermarkets restocked meat cases after Labour Day while buying for National Pork Month in October, traders said.

Anticipation of increased hog supplies beginning in a few weeks dragged on remaining futures contracts, they said.

Spot October closed up 0.150 cent/lb. at 68.925 cents, December slipped 0.05 cent to 63.55 and February ended 0.1 cent lower at 68.1 cents.

Wednesday morning’s wholesale pork price at $87.01/cwt was $1.15 higher than on Tuesday, with hams posting the biggest cost increase, based on USDA data.

The morning’s average cash hog price in Iowa/Minnesota was up five cents/cwt from Tuesday at $67.68, but down four cents in the western Midwest at $67.49, USDA said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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