Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures ended lower on Monday on fund liquidation and bearish fundamentals, traders said.
December ended down 0.075 cent per pound at 161.975 cents and February ended 0.425 cent/lb. lower at 161.75 cents (all figures US$).
Even though the overall supply of U.S. cattle is the lowest in decades, heavier-weight cattle are currently putting more beef in the pipeline at a time when slaughter schedules are slowing, said Dominic Varricchio at Schwieterman Inc.
Monday morning’s choice wholesale beef price was up 86 cents per hundredweight (cwt) from Friday at $245.89. Select cuts rose $1.40 to $235.50, the U.S. Department of Agriculture said.
Beef packer margins for Monday were a negative $139.20 per head, compared with a negative $115.55 on Friday and a negative $106.50 a week earlier, according to Colorado-based analytics firm Hedgersedge.com.
Last week, slaughter cattle in the U.S. Plains sold mostly at $164/cwt, down about $3 to $4 from the week before.
CME feeder cattle futures fell their three cents/lb. daily price limit on technical selling and live cattle market losses.
January and March ended at 222.6 cents/lb. and 218.25 cents/lb., respectively.
Hogs turn up
CME lean hogs edged higher after trading lower most of the session, pressured by fund selling and weaker cash hog prices, traders said.
February lean hogs closed 0.025 cent higher at 83.275 cents/lb. and April at 84.825 cents/lb., up 0.475 cent.
The CME lean hog index at 88.05 lent some support while the market waits for cash hog prices to improve, Varricchio said.
“Pork’s discount to beef should help demand in both the retail and wholesale markets,” he said.
Pork packers have been less aggressive buyers, seeking to keep their profit margins in the black as impending holiday closures crimp slaughter schedules.
Most packers have all the hogs they need until the end of the year, but some may need light amounts by the middle of the week, hog dealers said.
Monday morning’s Iowa-Minnesota average hog price was not available from the U.S. government, but Midwest regional dealers said prices were down at least 50 cents to $1/cwt.
— Meredith Davis reports on ag commodity markets for Reuters from Chicago.