Chicago | Reuters — Most Chicago Mercantile Exchange live cattle futures closed weak on Thursday after investors sold deferred months and bought April futures based on preliminary cash prices, traders said.
April live cattle closed up 0.2 cent/lb. to 126.5 cents. June ended down 0.375 cent/lb. to 116.9 cents, and August ended 0.5 cent lower at 113.925.
On Thursday a small volume of market-ready, or cash, cattle in Nebraska brought $125 to $128/cwt, down from mostly $134 there last week, feedlot sources said.
They said remaining cash bids across the U.S. Plains stood at $127/cwt against $134 asking prices. The bulk of cash cattle last week moved at $133 to $136.
“Futures are still at a discount to cash, even though prices so far have come in lower,” a trader said.
Processors curbed cash spending given future’s recent selloff, more cattle for sale than last week and lacklustre wholesale beef demand.
The morning’s wholesale choice beef price dropped $1.06/cwt from Wednesday, to $221.71. Select cuts rose 91 cents to $213.87, the U.S. Department of Agriculture said.
Investors await USDA’s monthly Cattle on Feed report on Friday at 2 p.m. CT.
The government will simultaneously issue the monthly cold storage report that will include total March beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 491.4 million lbs., and pork at 613.4 million lbs.
Short-covering and lower corn prices underpinned CME feeder cattle futures. April closed up 0.05 cent/lb. to 149.45 cents.
Hog market closes weak
CME lean hogs were pressured by profit-taking and futures’ huge premiums to the exchange’s hog index for April 19 at 67.02 cents, traders said.
Thinly traded May ended 0.2 cent/lb. lower at 77.025 cents, and most-active June finished down 0.075 cent to 79.525 cents.
The morning’s conflicting market fundamentals sidelined would-be futures buyers.
Cash hog prices in the Midwest Wednesday morning were mostly 50 cents to $1/cwt higher, contradicting government data that showed weaker cash prices.
Some packers have enough hogs into early next week, while a few others are struggling to fill inventories for what could be an 85,000-head Saturday slaughter, a trader said.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.