Chicago | Reuters — Most Chicago Mercantile Exchange live cattle contracts closed down slightly on Friday after investors tweaked positions in advance of Friday’s government’s monthly Cattle-On-Feed report at 2 p.m. CT.
Analysts expect the report to show fewer cattle entered feedlots last month than in September 2014.
“We were getting a bit over-bought and this is the right time to correct ahead of the Cattle on Feed report,” said Oak Investment Group president Joe Ocrant.
Subsequent short-covering and pre-report positioning lifted futures from session lows, pressured by record-high September beef stocks and caution while waiting for cash cattle prices later on Friday.
Spot October closed 0.6 cent/lb. higher at 141.025, December down 0.35 cent to 143.4 and February 0.175 cent lower at 145.075 cents.
Packers are short enough on cattle to buy them at the same price as last week, but not much higher given their thinner margins and lacklustre wholesale beef sales, a trader said.
Bids for market-ready (cash) cattle in Texas and Kansas were at $134-$136/cwt versus $140-$145 from sellers, feedlot said. Processors last week paid mostly $134 to $136.
Friday morning’s wholesale choice beef price was down 43 cents/cwt from Thursday, to $217.04. Select cuts rose $1.02, to $210.89, the U.S. Department of Agriculture said.
CME live cattle investors are tracking Hurricane Patricia moving along Mexico’s Pacific coast that could later create more problems with flooding in parts of Texas.
Initial live cattle futures selling undercut CME feeder cattle contracts, with October closing 0.5 cent/lb. lower at 195.05 cents.
Hog futures down hard
Lean hogs at the CME bowed to lower cash and wholesale pork prices along with last month’s pork inventory that hit an all-time high, traders said.
December closed 2.850 cents/lb. lower at 63.6 cents, and February ended down 1.975 cents/lb. to 66.15 cents.
Friday morning’s wholesale pork price slid $1.59 from Thursday to $86.43/cwt, USDA said.
Cash hogs in the Midwest on Friday morning traded steady to down $1/cwt from Thursday, regional hog dealers said.
“Packers have likely hit a wall in pork sales to grocers near the end of Pork Month which, along with sufficient supplies, has hurt cash prices,” a trader said.
The government estimated Saturday’s slaughter at 234,000 head, bolstered by plants making up downtime after repairs and maintenance earlier this week.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.