Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Wednesday closed lower following sliding wholesale beef prices, traders said.
June closed down 0.8 cent per pound to 152.5 cents, and August 1.375 cents lower at 150.625 cents.
The choice wholesale beef price, or cutout, on Wednesday fell $2.13 per hundredweight (cwt) from Tuesday to $249.46 (all figures US$). Select cuts dropped $1.54, to $239.81, the U.S. Department of Agriculture said.
Beef sales usually decline seasonally in June, traders and analysts said.
Other meat proteins are being considered by retailers and restaurants which featured beef prominently during National Beef Month in May, they said.
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Slumping beef cutout values, poor packer margins and available cattle contracted against June futures could pressure market-ready (cash) cattle prices this week.
However, there are fewer cattle for sale, which might lend pockets of support to cash values.
Kansas and Texas feedlots priced cash cattle at $162 to $163/cwt, with no packer bids reported, industry sources said. Last week, overall cash cattle in the U.S. Plains sold at $160.
“Futures remain at huge discount to cash prices, but no one wants to be first to stick their neck out and buy them,” said JRS Consulting owner Jack Salzsieder.
Technical selling surfaced after June and August moved below their respective 10-day moving average of 152.49 cents and 151.23 cents.
CME live cattle losses pulled down the exchange’s feeder cattle contracts.
August ended 1.425 cents/lb. lower at 222.9 cents.
Cash again undercuts hog futures
CME lean hogs were pressured by a second day of softer cash prices and spillover live cattle market pressure, traders said.
June closed down 0.925 cent/lb. to 83.55 cents, and July 1.325 cents lower at 82.475 cents.
USDA reported the morning’s average cash hog price in Iowa/Minnesota at $79.99/cwt, down 40 cents from Tuesday.
Processors with adequate inventories for this week’s production cut cash bids despite tight supplies, traders and analysts said.
Grocers purchased pork hand-to-mouth after buying enough product for Father’s Day while eyeing purchases for the U.S. Independence Day holiday, they said.
The government reported the morning’s wholesale pork price at $87.90/cwt, up 53 cents from Tuesday.
June and August drifted below their respective 20-day moving averages of 83.81 cents and 83.72 cents, which ignited fund liquidation and sell stops.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
