Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed lower on Monday, erasing Friday’s advances after investors struggled to find clear direction amid a host of market influences, traders said.
February live cattle closed down 0.65 cent/lb. to 131.425 cents, and April ended 0.85 cent lower at 132.225 (all figures US$).
“Uncertainty is never bullish,” one trader said.
He cited Monday’s slumping U.S. stock market, Friday’s mildly bearish government monthly cattle report and CME live cattle contract’s supportive discounts to some of last week’s cash prices.
Processors who needed supplies last week paid as much as $135/cwt for them, while others spent as little as $130 after fallen wholesale beef prices trimmed their profits.
The week before, cash cattle in the U.S. Plains fetched $132 to $134 per cwt.
Monday morning’s wholesale choice beef price shed 87 cents/cwt from Friday, to $223.96. Select cuts dropped $1.12, to $219.56, according to U.S. Department of Agriculture data.
The average beef packer margin for Monday was $69.30 per head, down from $70.75 for Friday and $115.70 a week ago, as calculated by consultancy HedgersEdge.com.
Traders and analysts are keeping close tabs on East Coast beef sales as residents there recover from a massive weekend winter storm.
CME February feeder cattle were supported by $3-$6/cwt higher cash feeder cattle prices. Remaining months were pressured by live cattle futures selling.
January feeders closed up 0.8 cent/lb. to 160.225 cents. March ended down 0.125 cent, to 157.775 cents, and April finished 0.5 cent lower at 157.325.
Mixed hog futures close
Anticipation of fewer pigs this spring underpinned CME lean hogs that were pressured by their premiums to the exchange’s hog index for Jan. 21 at 57.84 cents, traders said.
Spot February finished up 0.525 cent/lb., to 63.525 cents, and April ended down 0.225 cent, to 68.775 cents.
Despite the morning’s pullback in cash prices they appear to be generally firm, said Brock Associates analyst Doug Houghton, adding that packer margins remain strong and the most recent USDA quarterly hog report suggests tighter supplies ahead.
Monday morning’s cash hog price in Iowa/Minnesota averaged $55.77/cwt in light volume, down 56 cents from Friday, according to USDA.
HedgersEdge showed pork packer margins for Monday at $34.10 per head, up from $32.25 for Friday.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.