U.S. livestock: Live cattle futures decline on technical selling

Chicago Mercantile Exchange live cattle futures ended lower on Tuesday, pressured by technical selling and weaker wholesale beef prices, analysts and traders said.

As the Thanksgiving holiday season approaches beef demand typically diminishes in favor of turkey and ham. Analysts said less demand may cause a backlog of beef products, which could drive wholesale prices even lower.

The U.S. Department of Agriculture Tuesday morning reported the choice beef wholesale price at $199.88 per hundredweight (cwt), down 68 cents from Monday. Select cuts slid 47 cents to $189.24.

“There is the issue of demand on the beef side of the equation. A lot of skeptics say that you can’t move beef at these levels,” said Dan Norcini, an independent livestock futures trader.

Investors are uncertain about this week’s cash cattle price direction following live cattle futures’ recent selloff and as packer margins slipped deeper into the red.

There were no cash cattle bids or offers reported early on Tuesday, according to feedlot sources. Cash-basis cattle last week moved at $132/cwt.

USDA suspended its semi-annual U.S. cattle inventory report for a second year on Tuesday due to budget cuts.

Live cattle December finished down 0.95 cent per pound at 130.95 cents, and February closed at 131.675 cents, or 1.525 cents lower.

CME feeder cattle fell, led by fund liquidation and lower live cattle futures.

November feeders, which will expire on Nov. 22, closed down 0.475 cent at 164.375 cents/lb. January ended at 162.4 cents, 1.9 cents lower.

Hogs end mixed

CME hogs ended narrowly mixed, pressured by lower wholesale pork values while the rebound in cash hog prices offered support, traders and analysts said.

Some packers raised cash bids to ensure they have supplies for the rest of this week’s production.

Tuesday morning’s cash hog prices in the closely watched Iowa/Minnesota market jumped $3.30/cwt to $81.51, USDA said.

Increased hog numbers at heavier weights dragged on wholesale pork prices, Norcini said.

The government’s Tuesday morning wholesale pork price fell $1.25 from Monday to $91.43/cwt.

Packers on Monday and Tuesday processed 876,000 hogs, 46,000 more than a week ago and up 8,000 from a year ago for the same period, based on USDA estimates.

December hogs settled down 0.175 cent at 85.425 cents/lb., while February closed unchanged at 89.9 cents. April finished up 0.45 cent, to 92.75 cents.

— Meredith Davis reports on U.S. ag commodities for Reuters from Chicago.

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