Chicago | Reuters — Chicago Mercantile Exchange live cattle contracts finished in bearish territory on Wednesday, weakened by profit-taking and disappointing early-week cash prices, traders said.
December live cattle closed down 0.025 cent/lb. to 111.1 cents, and February down 0.275 cent to 113.7 cents (all figures US$).
Cattle at Wednesday morning’s Fed Cattle Exchange (FCE) brought mostly $110-$111.50/cwt. Last week, animals at the FCE and slaughter-ready, or cash, cattle in the U.S. Plains fetched $109-$112.
Bullish investors had hoped harsh weather in the Plains, enhanced packer profits and recent wholesale beef demand improvement would rally cash prices.
So far packers are standing their ground, armed with more animals for sale than last week and ample inventories as plants prepare to close over the Christmas and New Year’s holidays.
Cash prices were disappointing and the morning’s weaker beef values “contributed to the blues” in the market, said independent livestock futures trader Dan Norcini.
Wednesday morning’s choice wholesale beef price was $1.06/cwt lower than on Tuesday at $190.67. Select cuts rose 98 cents, to $176.32, the U.S. Department of Agriculture said.
Average beef packer margins for Wednesday were a positive $60.65 per head, up from a positive $38.05 on Tuesday and a positive $7.35 a week ago, as calculated by HedgersEdge.com.
Sell stops, profit-taking and weaker live cattle futures pulled down CME feeder cattle. January feeders closed 1.275 cents/lb. lower at 127.7 cents.
Uneven hog futures close
CME December lean hogs, which expired at noon CT, closed 0.675 cent/lb. higher at 57.85 cents after tracking the exchange’s hog index for Dec. 12 at 56.11 cents.
Speculative buying supported February lean hogs while profit-taking pressured other trading months, said traders.
Most actively traded February ended up 0.025 cent/lb., to 61.775 cents. April closed unchanged at 66.95 cents and May down 0.25 cent, to 72.7 cents.
Wednesday morning’s fallen wholesale pork values, as retailers finalize year-end holiday ham purchases, may discourage packers from paying more for supplies, said traders and analysts.
They added that processors may be close to topping off inventories for this week’s slaughter.
USDA data showed Wednesday morning’s average wholesale pork price slumped $1.11/cwt from Tuesday to $75.05, led by hams almost $8 lower.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.