U.S. livestock: CME live cattle down on profit-taking

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle closed lower on Tuesday on profit-taking, traders said.

The U.S. government’s monthly cattle on feed report pressured CME live cattle Friday afternoon, and the market retained a weak tone on Tuesday.

The focus has shifted from last week’s cattle on feed report to this week’s cash cattle trade.

Last week, cash cattle in the U.S. Plains traded at $159-$161 per hundredweight (cwt), steady to down $2 from the previous week, sources said (all figures US$).

Traders said the list of cattle available for sale may be slightly larger this week, which will pressure cash prices again.

Bear spreading, traders selling front-month contracts and buying the deferred months, also dragged on the CME June and August live cattle futures, traders said.

Tuesday morning’s choice wholesale beef price rose 25 cents/cwt from Friday to $260.50. Select cuts rose $1.13, to $248.75, the USDA said.

June closed 0.325 cent per pound lower at 151.8 cents, and August 0.075 cent lower at 150.625 cents.

CME feeder cattle drew support from lower corn prices and firm back-month live cattle futures.

August ended up 0.6 cents at 219.6 cents, and September was 0.525 cents higher at 218.525 cents.

Hog futures end lower

Weaker cash prices and soft hog demand, coupled with a stronger U.S. dollar, dragged on CME lean hogs, traders said.

June closed down 0.55 cent/lb. at 83.175 cents, and July closed down 0.925 cent lower at 82.8 cents.

Plants were closed over the U.S Memorial Day holiday, but some will add production time on Saturday, dealers said.

The holiday-shortened week limited the need for additional hogs and most packers have slaughter supplies filled through the end of this week, traders said.

U.S. government data quoted Tuesday afternoon’s wholesale pork price at $86.65/cwt, $1.07 higher than Friday.

The U.S. dollar index rose 1.37 per cent to 97.331.

“While the dollar doesn’t affect the meats on the day-to-day basis, it is a longer-term trend to monitor. When you get a big move in the dollar, it is going to put a cap on trade,” said Domenic Varricchio, of Schwieterman, Inc.

“If the dollar stays up for about two weeks, that uptrend will push commodity prices in general down and cattle and hogs are not excluded from that,” Varricchio said.

Meredith Davis reports on livestock markets for Reuters from Chicago.

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