CHICAGO, Aug 23 (Reuters) – Chicago Mercantile Exchange live cattle futures on Wednesday hit a nine-month low for the fourth time in the past five sessions, led by seasonally soft wholesale beef demand and lower initial cash prices, said
Fund liquidation contributed to declines after deferred contracts slipped below key technical support levels, they said.
August ended 1.075 cents per pound lower at 105.650 cents. October closed 1.550 cents lower at 106.175 cents and below the 10-day moving average of 106.985 cents.
Profitable margins are encouraging packers to process as many cattle as possible.
However, packers are paying less for supplies that have grown seasonally, which has discouraged grocers from buying beef at higher prices.
“Muted beef demand and year-over-year production gains are pushing prices lower,” American Restaurant Association chief analyst David Maloni wrote in his newsletter to clients.
On Wednesday a small number of slaughter-ready, or cash, cattle in Nebraska brought $117 per cwt, down from $109 to $110 there a week earlier.
Remaining packer bids in the U.S. Plains stood at $106 to $107 versus $112 asking prices from sellers, feedlot sources said.
For a second straight week no cattle changed hands at Wednesday morning’s Fed Cattle Exchange.
Market participants await USDA’s monthly Cattle-On-Feed report on Friday at 2 p.m. CDT (1900 GMT).
Technical selling and live cattle futures weakness weighed on CME feeder cattle contracts.
August feeders closed down 0.450 cent per pound to 141.625 cents.
For a fourth straight session CME lean hogs drifted to a four-month bottom as hefty supplies continued to drag down cash and wholesale pork prices, said traders.
Investors sold the October contract and simultaneously bought deferred months in a trading strategy known as bear spreading.
October ended down 0.325 cent per pound to 63.550 cents, and December finished down 0.200 cent at 58.850 cents.