By Theopolis Waters
CHICAGO, June 18 (Reuters) – Chicago Mercantile Exchange feeder cattle futures on Wednesday settled down their 3-cent per pound daily price limit on profit-taking, traders said.
Lower live cattle future and fund liquidation hastened CME feeder cattle losses, they said.
Feeder cattle futures reflect worries about how to make high-priced calves work with current market-ready cattle values and corn costs, said U.S. Commodities analyst Don Roose.
August and September finished 3.000 cents per lb. lower at 204.850 cents and 205.575 cents, respectively.
FEEDER CATTLE SELLING HITS LIVE CATTLE
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Prices for feed grains on the Canadian Prairies have “started to rebound a little bit,” said Matt Beusekom, trader with Market Place Commodities in Lethbridge.
Fund selling developed after futures on Tuesday peaked at a new contract high but finished below Monday’s low, which is known as a key reversal.
Futures lost ground despite solid beef demand as grocers prepare for U.S. July 4th holiday grilling advertisements.
Wednesday afternoon’s wholesale choice beef price rose $2.74 cents per hundredweight (cwt) from Tuesday to $239.54. Select cuts climbed $2.78 to $232.05, the U.S. Department of Agriculture said.
Prices for market-ready or cash cattle may feel pressure from more animals for sale as packers bought sparingly in recent weeks while cutting kills.
Cash cattle bids in Texas surfaced at $144 per cwt, and $142 to $144 in Kansas, said feedlot sources. Asking prices from sellers were $150 to $151, they said.
Last week, cash cattle in southern Plains moved at $148 per cwt, with sales of mostly $149 to $150 in Nebraska.
Investors await USDA’s monthly Cattle-On-Feed report on Friday.
The data is expected to show fewer cattle likely entered feedlots last month than a year ago.
June ended at 145.900 cents per lb., down 0.600 cent, and August dropped 0.700 cent to 145.025 cents.
MOST HOGS CLOSE LOWER
CME June hog futures closed higher with strong cash prices as packers top off inventories for this week’s slaughter, traders said.
The afternoon’s hog price in the Iowa-Minnesota market rose $1.12 per cwt. from Tuesday to $119.16, the USDA said.
Remaining hog contracts ended lower, pressured by speculation heavy hogs will continue to help offset production losses caused by the deadly Porcine Epidemic Diarrhea virus.
Bullish investors dumped positions well in advance of USDA’s quarterly hog report on June 27, traders said.
And, they said U.S. government approval this week of a PEDv vaccine discouraged buyers of deep-deferred CME hog contracts.
Market losses this week could stir bargain hunting on Thursday, a trader said.
June hogs ended up 0.500 cent per lb. at 125.425 cents. July closed down 0.775 cent to 127.275, and October fell 0.950 cent.
