Chicago/Reuters – Chicago Mercantile Exchange live cattle contracts settled flat to moderately lower following an up-and-down day on Monday, after traders sold deferred contracts and bought August because of its discount to last week’s cash prices, traders and analysts said.
Short-covering and the morning’s wholesale beef price uptick at times helped underpin the nearby trading months, they said.
Uneasiness about this week’s cash prices and last Friday’s slightly bearish government cattle reports exerted periodic market pressure, traders said.
Last week, cash cattle in the U.S. Plains moved at $145 to $146 per cwt, $2 to $3 lower than the week before, feedlot sources said.
Monday morning’s wholesale choice beef price was at $232.13 per cwt, up $1.43 from Friday. Select cuts were up 74 cents to $228.97, the U.S. Department of Agriculture said.
Speculative buyers are looking for wholesale beef and cash prices to bottom out seasonally around the end of July, according to traders.
Investors are unsure about this week’s cash price direction given 6,000 more cattle for sale than last week as packers cut kills to realign their margins.
Beef processor margins for Monday were at a negative $61.80 per head, compared with a negative $57.40 on Friday, as calculated by HedgersEdge.com.
August closed unchanged at 143.025 cents per lb, October down 0.150 cent at 143.975 cents and December 0.950 cents at 146.100 cents.
Live cattle futures selling and as much as $10 per cwt lower cash feeder cattle prices sank CME feeder cattle contracts.
August closed down 0.925 cent per lb at 208.750 cents.
Cash prices weaken hog futures
CME lean hogs felt pressure from sell-stops and plentiful supplies that continued to weigh on cash hog prices, traders said.
August ended down 0.150 cent per lb at 77.525 cents, and October 0.475 cent per lb lower at 63.550 cents.
“From what I’m hearing, packers got enough hogs so they don’t need anymore. So, we’ll see what happens from here,” said JBS Trading Co President James Burns.
USDA reported Monday morning’s average cash hog price in Iowa/Minnesota had fallen $1.97 per cwt from Friday to $73.56.
The day’s steep corn price drop stirred back-month hog market selling with the view that cheaper grain might cause farmers to feed more hogs and to heavier weight.