Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures slumped on Thursday, with pressure from profit-taking partly fueled by increased supply expectations, traders said.
April live cattle closed 1.425 cents/lb. lower at 116.15 cents, and June closed 1.075 cents lower at 106.725 cents (all figures US$).
“I’m surprised at the (futures) weakness given bullish near-term fundamentals. But previous USDA cattle reports have shown that we have an ample supply of cattle coming the rest of the year,” Oak Investment Group president Joe Ocrant said.
This week’s slaughter-ready, or cash, cattle in the U.S. Plains traded at $124-$126/cwt, steady to up $2 from last week, feedlot sources said.
Thursday morning’s choice wholesale beef price rose 44 cents/cwt to $207.12 from Wednesday. Select cuts were up 14 cents to $203.01, the U.S. Department of Agriculture said.
Thursday’s average beef packer margins were a positive $9.60 per head, up from a negative $29.35 a week ago, as calculated by HedgersEdge.com.
Technical selling and live cattle future’s losses dragged down CME feeder cattle.
March feeders closed 1.05 cents/lb. lower at 123.45 cents.
Hog futures end weaker
Softer cash and wholesale pork prices weighed on CME lean hogs, traders said.
They said light fund selling contributed to lean hog market weakness.
April hogs ended down 0.15 cent/lb. to 68.275 cents, and below the 10-day moving average of 68.572 cents. May closed down 0.025 cent to 74.1 cents, and under the 40-day moving average of 74.159 cents.
Thursday morning’s cash hog price in Iowa/Minnesota averaged $68.27/cwt, 81 cents lower than on Wednesday, USDA said.
U.S. government data on Thursday showed the average wholesale pork price dropped 51 cents/cwt to $81.11 from Wednesday, mostly due to a $2.97 drop in pork bellies.
“There are plenty of hogs around, and bigger numbers coming this spring and summer,” a Midwest hog merchant said.
Another merchant said the industry could see a large slaughter this week, unlike last week when weather issues and Monday’s holiday disrupted production.
Hog merchants predict a roughly 125,000-plus hog slaughter on Saturday, up from 119,000 head a week earlier.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.