Funds that track the Standard + Poor’s Goldman Sachs Commodity Index at times sold, or “rolled,” August futures and simultaneously bought October on the first of five days of the Goldman Roll process.

August ended 0.95 cent lower at 113.825 cents, and October finished down 0.4 cent to 113.425 cents (all figures US$).

Last week slaughter-ready, or cash, cattle in the U.S. Plains brought mostly $118 to $119/cwt.

Investors await the sale of more than 2,600 animals at Wednesday’s Fed Cattle Exchange. Animals there last week, on average, fetched $117.75/cwt.

Bullish investors believe better-than-expected cash prices late last week and impressive packer profits bode well for cash returns.

Market bears contend that processors are less likely to pay more for supplies in the midst of seasonally hot weather that tends to curtail grilling activities.

Additionally, some ranchers and feedlots are moving cattle to market earlier than they had planned to prevent potential stress and animal death loss from high heat and humidity in parts of the Plains.

Strong corn prices and weaker live cattle futures weighed on CME feeder cattle contracts.

August feeders ended 0.35 cent/lb. lower at 144.675 cents.

Softer lean hog futures

CME lean hogs drew pressure from sell stops and the roll by funds out of the August contract into deferred months, said traders.

July, which will expire on July 17, ended down 0.25 cent/lb. to 91.475 cents. Most actively-traded August finished 1.225 cents lower at 82 cents.

August futures remain at a bullish discount to cash prices, but investors are waiting for the July contract to expire before making their move, a trader said.

Packers raised bids for cash hogs whose numbers have declined seasonally as sultry weather slows down animal weight gains, he said.

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

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Funds trading in CME’s live cattle and hog markets shifted June long positions further back in a procedure known as the “roll” by followers of the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI).

Monday was the first of five days for the S+PGSCI roll process.

Futures also retreated following Friday’s cash prices that came in shy of early-week expectations. Packers relied on cattle bought in advance for delivery last week while trying to realign their poor profits by keeping cash bids low.

A week ago, packers in the U.S. Plains paid mostly $136/cwt for cash cattle that the week before sold at $133 to $137, said feedlot sources (all figures US$).

Monday’s average beef packer margin was a negative $50.50 per head, up from a negative $55.90 on Friday and a negative $39.55 last week, as calculated by HedgersEdge.com.

Retailers may be purchasing beef in advance of tighter supplies and spring grilling promotions after the Easter holiday, a trader said.

The afternoon’s wholesale choice beef price was up 45 cents/cwt from Friday, to $221.42. Select cuts were $1.75 higher, at $213.74, the U.S. Department of Agriculture said.

April and June live cattle ended down 0.4 cents/lb. to 135.95 and 126.075 cents, respectively.

CME feeder cattle felt pressure from live cattle market weakness. March closed 0.55 cent/lb. lower at 157.95 cents.

Weak hog futures close

Fund rolling pressured the April contract but minimized back month losses, traders said.

April closed 0.75 cent/lb. lower at 70.05 cents, May ended 0.175 cent lower at 77.15 cents and June finished down 0.025 cent, to 81.2.

Also, the day’s firm cash and wholesale pork values provided underlying futures support.

Monday afternoon’s average cash hog price in Iowa/Minnesota rose 55 cents/cwt from Friday, to $63.30, the USDA said.

The afternoon wholesale pork price on Monday was up 62 cents/cwt from Friday, to $75.84, based on government data.

Decent wholesale product demand and highly profitable margins are encouraging packers to maintain at least steady cash bids, said Midwest hog dealers.

HedgersEdge.com estimated Monday’s average pork packer margin at $21.25 per head, up from $20.95 on Friday and $17.75 last week, as calculated by HedgersEdge.com.

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

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February live cattle closed 0.65 cent/lb. lower at 132.225 cents, and April ended down 0.775 cent, to 133.05 cents (all figures US$).

Typically, cash bids surface around midweek. But a major processor in Texas on Monday bid $132-$133/cwt for market-ready, or cash, cattle, feedlot sources said.

Last week, cash cattle in the U.S. Plains sold at $131-$133/cwt, down as much as $3 from the previous week.

Market bulls said the early-week cash bid suggests the packer may need supplies while taking advantage of its highly profitable margins and surging wholesale beef values.

Bearish traders point to almost 32,000 more cattle for sale than last week, and the possibility that soaring wholesale beef values may soon stall.

Monday afternoon’s wholesale choice beef price climbed $3.12/cwt from Friday, to $235.32. Select cuts rose $2.09, to $229.07, based on U.S. Department of Agriculture data.

The average beef packer margin for Monday was $109.60 per head, up from $75.15 for Friday and a negative $11.90 a week ago, as calculated by consultancy HedgersEdge.com.

“Cheaper cattle and high-priced beef worked wonders for packer margins,” a trader said.

Funds sold the February contract, and simultaneously bought deferred months, tied to the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI).

Monday was the second of five days of the process known as the S+PGSCI “roll.”

At the same time, some index funds bought CME livestock contracts as part of their annual rebalancing of commodity holdings.

Lower corn futures underpinned the January CME feeder cattle contract. But other months felt pressure from sharply lower cash prices for feeder cattle.

January feeders closed up 0.025 cent/lb. to 159.45 cents. March dropped 0.525 cent to 156.8, and April was 0.575 cent lower at 156.8 cents.

Mainly firm hog market settlement

Most CME lean hog months ended firm after funds rolled February positions into back months, traders said.

Spot February finished down 0.15 cent/lb. to 59.7 cents. April ended 0.25 cent higher at 65.475 cents, and May up 0.15 cent, to 73.25 cents.

The lack of clear cash and wholesale pork price direction kept market participants on the defensive.

Technical issues at Smithfield Foods has affected hog production at a number of its facilities, a company spokeswoman said Monday.

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

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Funds trading in CME’s live cattle and hog markets shifted June long positions further back in a procedure known as the “roll” by followers of the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI).

Monday was the third of five days for the S+PGSCI roll process.

Sellers outnumbered buyers despite futures’ discounts to last week’s prices for market-ready (cash) cattle.

Last week, cash cattle in the U.S. Plains fetched $161 to $164 per hundredweight (cwt), compared to $160 to $163 the previous week, industry sources said (all figures US$).

This week, more cattle are available after processors recently cut kills and drew from cattle contracted against the futures market, traders and analysts said.

Reduced slaughters slowed the flow of beef to wholesale meat buyers, they said.

Monday morning’s choice wholesale beef price was up $1/cwt from Friday, to $259.12/cwt. Select cuts jumped $1.53, to $248.35, the U.S. Department of Agriculture (USDA) said.

June ended 1.25 cents lower at 150.25 cents per pound, and August down 1.025 cents, to 148.8 cents.

CME feeder cattle May futures drew support from firm cash feeder cattle prices.

Remaining contracts were pressured by the exchange’s live cattle market losses.

May closed 0.9 cent/lb. higher at 216.775 cents, August down 0.2 cent to 217.425 cents and September 0.275 cent lower at 216.45 cents.

Hog futures sag

CME lean hogs settled weaker, partly due to funds who implemented the S+PGSCI roll, traders said.

“We’re getting the roll and that’s really what’s pressing the market,” said hog futures trader Bill Cipolla.

May hogs closed down 0.15 cent/lb., to 80.7 cents, and June 0.55 cent lower, to 84.275 cents.

May futures are nearly in line with Iowa/Minnesota cash prices heading into its Thursday expiration.

The government reported Monday morning’s average cash hog price in Iowa/Minnesota up $1.37 per cwt from Friday to $80.53.

To offset higher cash prices, processor curbed production which lifted wholesale pork values, a trader said.

Separate government data quoted the Monday morning’s wholesale pork price at $80.82/cwt, $1.25 higher than on Friday.

Back-month premiums’ to cash prices, and the exchange’s hog index for May 7 at 77.14 cents, deterred would-be buyers.

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

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