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U.S. livestock: Beef, profit-taking weaken CME live cattle

Chicago | Reuters –– Chicago Mercantile Exchange live cattle contracts on Thursday eased from Wednesday’s three-cent per pound limit-up settlement, pressured by profit-taking and seasonally struggling wholesale beef values, said traders.

They said futures’ discounts to preliminary cash prices limited market losses.

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

August ended 0.45 cent/lb. lower at 117.425 cents. October closed unchanged at 117.825 cents (all figures US$). December finished down 0.1 cent at 118.225 cents.

On Friday CME live cattle futures will resume their normal three-cent price limit after failing to settle up or down the expanded 4.5-cent limit on Thursday.

Futures’ bullish discounts to cash prices versus bearish wholesale beef values made it difficult to trade the market on Thursday, said Oak Investment Group president Joe Ocrant.

So far this week packers in the U.S. Plains paid $120/cwt for slaughter-ready, or cash, cattle that a week ago brought $117-$119, said feedlot sources.

They said feedlots are asking more than $120/cwt for unsold cattle, given slipping but still profitable packer profits.

However, processors are aware that people typically grill less in extremely hot weather, which has dragged down wholesale beef values in recent weeks.

CME feeder cattle finished higher, led by sharply lower corn prices and follow-through buying after futures’ 4.5-cent limit-up settlement on Wednesday.

August feeders ended 1.275 cents/lb. higher at 153.025 cents. Feeder cattle future will return to their usual 4.5-cent limit on Friday after not finishing up or down Thursday’s 6.75-cent expanded limit.

Hog futures end mostly firmer

Most CME lean hog trading months benefited from their discounts to the exchange’s hog index for July 11 at 92.75 cents.

The roll by funds weighed on August futures and propped up the October contract.

July, which will expire on Monday, ended up 0.175 cent/lb. to 92.75 cents. Most actively-traded August finished down 0.1 cent to 82.525 cents, and October ended up 0.05 cent, to 69.325 cents.

Tight hog supplies underpinned cash prices, while retailers consider featuring beef that is now more competitively-priced to pork, said traders and analysts.

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

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