Chicago | Reuters — Chicago Mercantile Exchange live cattle futures eased on Monday on profit-taking and technical selling, although losses were limited by firm wholesale beef prices and the discount of futures to cash prices, traders said.
April live cattle closed down 0.425 cent/lb. to 115.55 cents, slipping below the contract’s 50-day moving average around 115.871 (all figures US$). June ended down 0.475 cent at 106.275 cents and August was 0.2 cent lower at 102.075 cents.
Cash cattle markets were quiet to start the week after trading near steady prices last week.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Tight market-ready cattle supplies in Nebraska could underpin cash prices this week, although packers may be reluctant to aggressively bid on cattle as their processing margins have only recently turned positive, analysts said.
The wholesale choice boxed beef cutout value jumped $1.53/cwt on Monday afternoon to $209.60 while select cuts slipped by nine cents to $203.96/cwt, according to the U.S. Department of Agriculture.
Monday’s average beef packer margins were a positive $22.75 per head, up from a negative $20.20 a week ago, as calculated by HedgersEdge.com.
Technical selling and spillover pressure from declining live cattle futures weighed down CME feeder cattle.
March feeders closed 0.15 cent/lb. lower at 124.075 cents.
Hogs advance
CME lean hog futures edged higher on Monday on short covering and bargain buying following a steep drop on Friday and as wholesale pork prices ticked higher.
Gains, however, were slowed by concerns about a looming herd buildup as the most recent U.S. government quarterly hog report showed large numbers of pigs coming to market this spring and summer.
April hogs ended 0.425 cent per pound higher at 67.175 cents while May futures were up 0.3 at 73.05 cents.
Traders were monitoring news about the country’s first outbreak of bird flu this year on a chicken breeding farm in Tennessee. Some importers have already moved to curb U.S. poultry and products.
“If the bird flu outbreak prompts (U.S.) consumers to move away from chicken and looking at other meats, that may be initially supportive for pork. But it will become bearish over time because of the backup of meat supply,” said Steve Georgy, vice-president at Illinois-based consultancy Allendale Inc.
USDA data on Monday showed the average wholesale pork price, or cutout, jumped $1.90/cwt from Friday to $82.53.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.
