U.S. livestock: Fallen cash prices rattle CME live cattle

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures suffered their fourth straight day of losses on Wednesday after digesting sharply lower preliminary prices for market-ready (cash) cattle, traders said.

Spot-August futures closed down 1.95 cents/lb. to 145.25 cents, and October 2.25 cents lower at 145.15 cents (all figures US$).

Earlier on Wednesday, a small number of cash cattle in Nebraska sold at $145/cwt, a drop of as much as $5 from last week, feedlot sources said.

Investors await cash sales in Kansas and Texas where bids stood at $146 against $152 to $153 asking prices. A week ago, U.S. Plains cattle moved at mostly $148 to $150.

“Nebraska had the most to lose this week because they had more cattle for sale than elsewhere,” a trader said.

Supply uncertainty ahead and worries over forthcoming beef demand exerted more pressure on CME live cattle futures.

Wednesday morning’s wholesale choice beef price, or cutout, jumped $2.05/cwt from Tuesday to $247.13/cwt. Select cuts rose $1.17, to $237.42, the U.S. Department of Agriculture said.

“I think packers are just getting started breaking the cash market, partly because beef is not competitive with pork and poultry,” said Archer Financial Services broker Dennis Smith. The morning’s beef cutout hike may be short-lived, he said.

Sell stops and fund liquidation further sank futures to session lows, which at times attracted bargain hunters.

Investors await USDA’s monthly Cattle-On-Feed report on Friday.

CME feeder cattle closed lower on technical selling and live cattle futures losses. August finished down 0.750 cent/lb. to 213.8 cents.

Hog futures close uneven

CME lean hogs were pressured by soft market fundamentals, but supported by futures’ discounts to the exchange’s latest hog index at 78.8 cents, traders said.

The spot-October contract closed down 0.125 cent/lb., to 66 cents, and December up 0.025 cent, to 62.275.

Wednesday morning’s cash hog prices in the Midwest were steady to weak compared to Tuesday’s sales, regional hog dealers said.

The morning’s wholesale pork price at $89.70/cwt had slipped 42 cents from Tuesday, following a $2.77 drop in pork bellies, USDA said.

Abundant hog numbers kept a lid on cash values, while pork belly prices at wholesale may be close to peaking as the end of the summer BLT sandwich season approaches, traders and analysts said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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