Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed lower for a second day in a row on Thursday, pressured by lacklustre wholesale beef demand that could drag down this week’s cash prices, traders said.
August closed 0.525 cent/lb. lower at 146.5 cents, and October down 0.8 cent at 149.425 cents (all figures US$).
The U.S. Department of Agriculture reported Thursday afternoon’s wholesale choice beef price (cutout) had dropped 99 cents/cwt from Wednesday to $233.95. Select cuts fell $2.89, to $230.82.
“With beef export demand slowing and the cutout continuing to weaken seasonally, end-users are balking at higher prices and sitting on their hands,” said livestock futures trader Dan Norcini.
Investors see processors spending less for market-ready, or cash, cattle than last week based on their poor margins, more livestock for sale and competition from other cheaper meat proteins.
Cash cattle bids in the U.S. Plains stood at $146 to $147/cwt against $153-plus asking prices, feedlot sources said.
Last week, cash cattle sold at $150 to $151.50/cwt.
CME feeder cattle felt pressure from profit-taking, technical selling and sagging live cattle futures.
August closed 0.85 cent/lb. lower at 214.475 cents.
Mixed hogs settlement
CME’s August lean hog contract was supported by its discount to the exchange’s latest hog index at 80.59 cents, traders said.
Fund liquidation and worries about building supplies ahead dropped October futures, they said.
August ended 0.7 cent/lb. higher at 76 cents, and October 0.45 cent lower at 64.525 cents.
The average price of cash hogs in Iowa/Minnesota on Thursday afternoon was at $76.10/cwt, 66 cents lower than on Wednesday, USDA said.
Processors have enough inventory for near-term production which, along with sporadic wholesale pork buying, has helped improve their profit margins, a trader said.
HedgersEdge.com calculated pork packer margins for Thursday at a positive $4.50 per head, compared with a positive $1.25 on Wednesday.
USDA data showed the afternoon’s wholesale pork price at $82.65/cwt, up 10 cents from Wednesday, underpinned by $2.96 higher costs for pork bellies.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.