U.S. livestock: Equities rout plunges CME live cattle limit down

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures settled down by their three-cent/lb. daily price limit on Friday after U.S. stock futures plummeted amid global economic jitters, traders said.

February live cattle and April closed at 127.55 cents and 128.5 cents, respectively (all figures US$). Live cattle’s trading limit will be expanded to 4.5 cents on Tuesday.

The CME will be closed on Monday in observance of the U.S. Martin Luther King, Jr. holiday.

“A lot of these moves lower are related not so much to specific fundamentals in each commodity market, but rather to a larger macro-trade which involves selling commodities across the board,” said independent live stock futures trader Dan Norcini.

Expectations of possibly lower cash cattle prices next week, as the recent surge in wholesale beef prices appeared to have ended, contributed to the live cattle market’s somber mood, said traders.

This week, packers paid $132-$134/cwt for market-ready, or cash cattle, compared to $131-$133 last week, said feedlot sources.

Friday morning’s wholesale beef price slumped $2.51/cwt from Thursday to $232.65. Select cuts fell $1.80, to $227.63, the U.S. Department of Agriculture said.

Futures losses mounted after drifting beneath recent session lows, which triggered sell stops.

Fund liquidation developed after some deferred trading months filled a major chart gap between the Dec. 21 low and the Dec. 18 high.

CME feeder cattle ended down the 4.5-cent/lb. price limit, following live cattle future’s heavy losses. January feeders closed 154.3 cents. The limit will be expanded to 6.75 cents on Tuesday.

Weak hog futures settlement

Fallout in live cattle market, and the morning’s soft wholesale pork values, leaned on CME hog futures, traders said.

Spot February and April ended down 0.325 cent/lb. to 62.025 cents and 67.45 cents, respectively.

The government reported the morning’s wholesale pork price at $71.69/cwt, down 45 cents from Thursday, with lower costs for all categories except hams.

Some end users are preparing to feature hams for the Easter holiday that will arrive earlier this year, said analysts and traders.

Friday morning’s steady cash prices limited future’s losses and suggests packers need hogs into early next week, a trader said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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