U.S. livestock: CME live cattle, feeder cattle slump limit down

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures on Tuesday fell by their three-cent daily price limit as lower-trending wholesale beef values stirred expectations for another round of weaker cash prices later this week, traders said.

Spot-October and December closed at 129.175 and 134.150 cents/lb., respectively (all figures US$). Live cattle’s trading limit will be expanded to 4.5 cents on Wednesday following Tuesday’s limit-down settlement.

Wholesale choice beef prices, or cutout, dropped for a sixth straight session on Tuesday morning to 210.01 cents/lb., down 93 cents from Monday. Select cuts sagged 83 cents to 208.59, the U.S. Department of Agriculture said.

Last week, market-ready (cash) cattle moved at $128 to $130/cwt, down as much as $6 from last week, feedlot sources said.

Futures’ tumble, a slight increase in heavyweight cattle for sale from last week, and expectations that seasonal beef demand will not bottom out until around mid-October are bearish cash influences, traders and analysts said.

David Maloni, chief analyst with the American Restaurant Association, pointed out that the choice beef cutout has fallen nearly 10 per cent so far in September — the biggest decline for the month since 1989.

“Anytime you see a market that’s doing something really historically abnormal, like we’re seeing in beef right now, tells me we’re going to find a bottom soon,” said Maloni.

Most CME feeder cattle contracts finished down by their 4.5-cent/lb. limit following the steep drop in cash feeder cattle prices and live cattle future’s limit-down move. Feeder cattle trading limits will be expanded to 6.75 cents on Wednesday.

October ended at 180.825 cents/lb., down 4.45 cents. November and January finished limit down at 176.95 and 171.2 cents.

Hogs up with cash, pork

Technical buying, along with higher cash and wholesale pork prices, boosted CME lean hogs, traders said.

Spot-October hogs closed 1.825 cents/lb. higher at 73.25 cents, and December up 1.3 cents, to 67.05 cents.

USDA reported Tuesday morning’s Iowa/Minnesota average cash hog price at $69.77/cwt, $1.20 higher than on Monday.

The morning’s wholesale pork price was at $86.20/cwt, up $1.06 from Monday, according to USDA.

Supermarkets in a few weeks will look to stock meat cases with beef after featuring pork during National Pork Month in October, analysts and traders said.

He added that profitable margins encourage packers to maintain active slaughter rates.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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