Chicago | Reuters — Chicago Mercantile Exchange live cattle futures ended modestly lower on Tuesday on profit-taking after a two-session advance, softer cash cattle prices and weaker wholesale beef prices, traders said.
CME February live cattle settled down 0.55 cent at 138.3 cents/lb. but stayed inside of Monday’s trading range (all figures US$). For feeder cattle futures, most-active March fell 0.075 cent, to 166.4 cents/lb., while spot January feeders slid 0.95 cent to end at 164.575 cents.
Cash cattle traded lightly in Kansas at $138 per hundredweight (cwt), traders said, $2 cheaper than last week’s top price, as meat packers planned for lighter kills during the upcoming holiday weeks.
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Wholesale boxed beef prices fell, with choice cuts down $2.50, at $260.72/cwt, the lowest since April 5, and select cuts down $4.84, at $248.80/cwt, according to the U.S. Department of Agriculture.
“If we can’t really get boxed beef to start turning higher seasonally, that is going to get the packers to sit on their hands,” potentially anchoring cash cattle prices, said Matt Wiegand, a commodity broker for FuturesOne.
“The packers are still making good money, but not what they were,” Wiegand said.
Profit margins for beef processors on Tuesday fell to $185.30 per head of cattle from $191.05 on Monday and $236.90 a week ago, according to livestock marketing advisory service HedgersEdge.
On the hog side, CME lean hog futures fell for a second session after Friday’s four per cent surge. The benchmark February hog contract settled down 0.675 cent at 80.075 cents per pound.
U.S. wholesale pork values declined with the carcass priced at $85.48/cwt, down $1.55 from Monday, USDA reported.
“The pork cutout, it’s really treading water. That is probably limiting buying enthusiasm here,” Wiegand said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
