By Theopolis Waters
CHICAGO, Dec 3 (Reuters) – Chicago Mercantile Exchange live cattle futures posted significant losses on Thursday for a second straight session, with nearby contracts posting new lows, in response to weaker cash prices, traders said.
Spot December closed 3.400 cents lower at 125.700 cents per lb, and made a new low of 124.600 cents. February closed 2.175 cents lower at 129.450 cents per lb after marking a fresh low of 127.325 cents.
So far this week, the bulk of market-ready cattle in the U.S. Plains moved at $124 to $126 per cwt, compared to mostly $126 to $127 last week, said feedlot sources.
Unprofitable packer margins and more animals for sale this week weighed on cash prices, said traders.
David Hales, author of the Hales Cattle Letter, said traders came to the realization that some packers will only process animals three to four days each week over the Christmas and New Years holiday.
“Next week could be the last week any packers buy cattle for the balance of year,” he added.
Market participants are eyeing wholesale beef demand that tends to pick up seasonally as consumers shop for steaks and roasts.
Thursday morning’s wholesale Choice beef price climbed $1.38 per cwt from Wednesday to $205.46. Select cuts rose $1.01 to $193.26, based on U.S. Department of Agriculture data.
Higher corn prices and lower live cattle futures pressed CME feeder cattle contracts to new lows. January ended 0.975 cent lower at 159.750 cents per lb, and marked a new low at 156.775 cents.
HOG FUTURES DOWN, BUT OFF LOWS
CME lean hogs’ premiums to the exchange’s hog index for Dec. 1 at 55.81 and the morning’s soft cash prices pressured hog contracts, traders said.
Spot December finished 1.000 cent lower at 58.350 cents per lb and February closed down 0.325 cent to 58.825 cents.
USDA data showed Thursday morning’s average cash hog price in Iowa-Minnesota had fallen 69 cents per cwt from Wednesday to $52.50.
Packer inventories are almost full for this week, including an estimated 220,000-plus head Saturday kill, traders and analysts said.
Deferred contracts eased from morning lows on short-covering and the prospect that farmers might raise fewer hogs and feed them to lighter weight if corn prices continue to climb, said analysts and traders.
They said some investors purchased back months and simultaneously sold December futures ahead of its expiration on Dec. 14.
