Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts closed moderately lower on Tuesday after traders sold deferred months and bought June as wholesale beef values improved, traders said.
June live cattle closed up 0.45 cent/lb., at 121.225 cents (all figures US$). August ended 0.55 cent/lb. lower at 116 cents, and October finished down 0.5 cent at 115.5 cents.
The prospect of increased cattle supplies in the coming weeks further pressured back months.
“The cattle market seems fixated on larger supplies ahead,” said Brock Associates analyst Doug Houghton. He also cited negative technical action on Monday led by deferred months that retreated after peaking at their highest levels since May 19.
The morning’s choice beef price, or cutout, was at $224.41/cwt, up 31 cents from Monday. Select cuts jumped $2.29, to $202.37, the U.S. Department of Agriculture said.
Supermarkets bought beef for Father’s Day and U.S. Fourth of July holiday advertisements, traders and analysts said.
An uptrend in beef cutout values, and roughly 30,000 fewer cattle for sale than last week, could underpin prices for market-ready (cash) cattle by Friday.
Cash bids in Texas surfaced at $125/cwt against $130-$132 asking prices from sellers there, said feedlot sources. Last week, cash cattle in the U.S. Plains brought $124-$132.50.
Investors eyed forecasts for hot weather in parts of the U.S. Plains over the weekend that may slow down cattle weight gains, which could later lend more support to cash and wholesale beef prices.
Lower back-month live cattle futures pressured CME feeder cattle contracts. August closed down 0.075 cent/lb., to 145.45 cents.
Hog market closes lower
CME lean hogs closed lower on profit-taking following a wholesale pork price drop that might prompt packers to cut cash bids, traders said.
“I think we’ll be led by the product. So depending on what it does, cash will kind of follow,” an Iowa hog dealer said.
Tuesday morning’s wholesale pork price slumped $1.34/cwt from Monday to $85.47/cwt, said USDA.
Government data on Tuesday showed the morning average cash hog price in Iowa/Minnesota up a penny from Monday to $76.33, and 13 cents higher to $75.97 in the western Midwest.
Spot June closed down 0.4 cent/lb., to 81.85 cents. July ended 0.525 cent lower at 86.275 cents, after earlier posting a new contract high of 87.65 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.