By Theopolis Waters
CHICAGO, June 11 (Reuters) – Chicago Mercantile Exchange live cattle futures snapped a three-day win streak on Thursday, pressured by profit-taking and wholesale beef price downturn, traders said.
June closed down 0.575 cent per pound to 155.225 cents, and August 0.600 cent lower at 152.925 cents.
Thursday morning’s wholesale Choice beef price, or cutout, dropped 64 cents per hundredweight (cwt) from Wednesday to $247.02. Select cuts fell 41 cents to $240.32, the U.S. Department of Agriculture said.
The recent surge in wholesale beef costs may have deterred grocers who are topping off inventories for Father’s Day and U.S. Fourth of July grilling demand, traders and analysts said.
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Potential futures buyers clung to the sidelines while waiting for market-ready, or cash cattle, to change hands.
“It all comes down to a guessing game of who is going to blink first, the packers or the feedlots,” said independent livestock futures trader Dan Norcini.
On Thursday, a few cash cattle in Kansas moved at $155 per cwt, the same as last week in the state, industry sources said. Bids elsewhere in Kansas and Texas remained at $152 per cwt. against feedlots that priced cattle at $158 to $159, they said.
In a trading strategy known as bear spreading, traders periodically sold June and bought deferred contracts, partly on worries that June’s brief spike over 156.000 cents on Thursday might result in deliveries against the contract.
Profit-taking and live cattle market losses pressured CME feeder cattle futures.
August ended 0.525 cent per lb. lower at 226.250 cents.
HOG FUTURES END MOSTLY LOWER
Sell stops, soft cash prices and lower wholesale pork values weighed on CME lean hogs, traders said.
CME’s hog index for June 9 at 82.16 cents supported the June contract on the eve of its expiration on Friday.
June closed up 0.075 cent per lb. to 81.375 cents, July down 0.700 cent to 79.175 and August 0.725 cent lower at 78.525 cents.
Cash hogs in the Midwest Thursday morning sold steady to 50 cents per cwt. lower than on Wednesday amid plentiful supplies, according to regional hog dealers.
Retailers bought pork hand-to-mouth due to ample numbers of hogs, traders and analysts said.
Government data quoted the morning’s wholesale pork price at $85.96 per cwt., $1.12 lower than on Wednesday.
Back-month futures buyers were uneasy in advance of USDA’s monthly quarterly hog report on June 29 that may show more hog production than anticipated.
