U.S. livestock: Cash price caution pressures CME live cattle

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures closed weaker on Thursday as investors wait for remaining slaughter-ready, or cash, cattle to change hands by Friday, traders said.

December live cattle closed down 0.375 cent/lb. at 110.725 cents, and February was 0.425 cent lower at 113.275 cents (all figures US$).

Packers may resist paying more for remaining supplies after most cattle at Wednesday’s Fed Cattle Exchange brought $110-$111.50/cwt, said traders. Animals elsewhere in the U.S. Plains brought $109 to $112 last week.

There are more cattle for sale this week and some processors are thought to have adequate inventories prior to shutting down plants over the Christmas and New Year’s holidays.

However, market bulls cling to hope that much-improved packer profits and Thursday’s beef cutout price increase bode well for cash returns.

Thursday morning’s choice wholesale beef price was $1.80/cwt higher than on Wednesday at $192.68. Select cuts rose $1.71 to $178.08, the U.S. Department of Agriculture said.

Average beef packer margins for Thursday were a positive $64.20 per head, up from a positive $60.65 on Wednesday and a negative $10.40 a week earlier, as calculated by HedgersEdge.com.

Soft corn futures and higher cash feeder cattle prices underpinned CME feeder cattle.

January feeders closed unchanged at 127.7 cents/lb., March up 0.125 cent to 124.75 cents and April unchanged at 124.225 cents.

Strong hog futures settlement

CME lean hog futures reached a 3-1/2-month high, with strength from buy stops, short-covering and Thursday morning’s wholesale pork price rebound, said traders.

February ended up 0.625 cent/lb. at 62.4 cents, and April closed 0.525 cent higher at 67.475 cents.

USDA data showed the morning’s average wholesale pork price rose 78 cents/cwt from Wednesday to $76.31, following nearly $8 higher hams.

Retailers may be filling in gaps in their ham inventories before the Christmas holiday, traders and analysts said. Cash prices are expected to move lower the closer packers come to closing plants for the holiday, they said.

Thursday morning’s cash hog prices in Iowa/Minnesota averaged $53.48/cwt in light volume, a $2.06 drop from Wednesday, USDA said.

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

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