Chicago | Reuters — Chicago Mercantile Exchange live cattle lost ground on Tuesday after investors exercised caution in advance of this week’s prices for market-ready, or cash, cattle, said traders.
There may have been some disappointment after initial bids for cash cattle came in below last week’s sales, a trader said.
On Tuesday packers had bid $110/cwt for cash cattle in Texas and Kansas with feedlots pricing animals at $115. Cash cattle in the U.S. Plains last week fetched mostly $113.
Bullish traders believe some processors that remain short bought on supplies could pay up for cattle given their impressive margins.
Market bears contend that most packers may have bought enough cattle last week to satisfy near-term production.
Investors said Wednesday’s Fed Cattle Exchange auction of more than 1,200 animals should dictate this week’s overall cash prices. Last week, cattle at the auction brought $112/cwt.
August live cattle closed 0.675 cent/lb. lower at 108.05 cents. October ended down 0.275 cent at 110.325 cents.
CME feeder cattle tracked weaker live cattle contracts.
August closed down 0.5 cent/lb. at 152.75 cents.
Front hog futures end down, backs up
CME nearby hog futures finished weaker, led lower by Tuesday morning’s lower cash and wholesale pork prices, said traders.
They said short-covering and U.S. trade optimism lifted deferred hog contracts.
Production at JBS’ Marshalltown, Iowa pork plant is slowly resuming normal operations after a tornado hit the facility late last week, traders and hog merchants said regarding lower cash hog prices.
A major processor is expected to briefly close some of its plants for equipment upgrades, they added.
On Tuesday, USDA announced an aid package for farmers hurt by U.S. trade disputes, a day after Mexico signaled efforts to jumpstart NAFTA trade talks.
“Aid news might have rallied the market. But Trump sent out a tweet yesterday which sounded optimistic on a NAFTA deal with Mexico… that, if true, would take a lot of concern out of the hog market,” said independent livestock futures trader Dan Norcini.
“Proof of the pudding is in the eating, however,” said Norcini.
August hogs ended 0.875 cent/lb. lower at 65.55 cents. October closed down 0.1 cent at 52.525 cents.
— Reporting for Reuters by Theopolis Waters in Chicago.