U.S. livestock: Fund selloff reverses CME live cattle rally

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures turned lower on Friday, after fund liquidation and lower expected cash prices later in the day pared Thursday’s market gains, traders said.

August live cattle ended 1.8 cents/lb. lower at 110.925 cents, and October closed 2.225 cents lower at 109.85 cents (all figures US$).

Both contracts finished below their respective 10-day moving average of 111.68 and 112.8 cents.

Market-ready, or cash, cattle bids in the southern U.S. Plains were $116-$117/cwt against $120-$122 asking prices, said feedlot sources. Last week, cash cattle in the Plains fetched mostly $120.

The day’s futures setback, tepid seasonal wholesale beef demand and more cattle for sale than last week may again pressure cash prices, said traders and analysts.

But hot weather forecasts for the Plains could slow down animal weight gains, which typically supports cash and wholesale beef prices.

“Truth is the futures have been in and continue to be in a bear market. Just because fundamentals are better hasn’t altered that fact,” said Cassandra Fish, author of industry blog The Beef.

The morning’s choice beef price was up 37 cents/cwt, to $205.37, from Thursday. Select cuts gained 18 cents, to $193.24, the U.S. Department of Agriculture said.

CME feeder cattle futures succumbed to fund selling and live cattle futures’ losses. August feeders closed 2.125 cent/lb. lower at 139.575 cents.

Lower hog futures close

CME July lean hogs, which expired at noon CT, settled down 0.3 cent/lb. to 80 cents, and close to the exchange’s hog index for July 13 at 81 cents.

Remaining futures months were pressured by the seven-day cash hog price slide and anticipation of increased supplies in the months ahead, traders said.

August, the new lead contract, finished 0.675 cent/lb. lower at 77.925 cents, and October down 1.4 cents, to 66 cents.

USDA reported Friday morning’s average cash hog price in Iowa/Minnesota dropped $1.13/cwt from Thursday to $75.66 in light sales volume.

Packers trimmed operating hours and limited Saturday kills that could enhance their margins, lift wholesale pork values and compensate for overall seasonally tight supplies, traders and Midwest hog merchants said.

Friday morning’s wholesale pork price was up 74 cents/cwt from Thursday to $90.86, said USDA.

Friday’s average pork packer margins were estimated at $25.75 per head, up from $23.40 on Thursday, according to HedgersEdge.com.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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