CHICAGO, Aug 25 (Reuters) – Chicago Mercantile Exchange live cattle contracts on Thursday tallied losses for a ninth day in a row, pressured by bearish market fundamentals that offset futures’ discount to cash prices, traders said.
August live cattle ended down 0.250 cent per pound to 112.475 cents. Most actively traded October closed 0.375 cent lower at 108.525 cents.
The cattle and beef sectors have struggled at a time when demand typically increases for Labor Day grilling and government purchases for school lunch programs, said U.S. Commodities analyst Don Roose.
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“We were looking for demand to hold us together and that’s been a failure. Now we’re looking at the supply side which has too much meat,” he said.
Packers this week paid $114 to $116 per cwt for market-ready, or cash, cattle that last week brought $117 to $118, said feedlot sources.
From Monday to Thursday, packers processed 451,000 head of cattle, up 14,000 from the same period last year, according to U.S. Department of Agriculture estimates.
Sell stops, fund liquidation and weaker CME live cattle futures sank CME feeder cattle contracts.
August feeders, which expired at noon CDT (1700 GMT), settled at 146.725 cents per pound, up 0.075 cent. It closed just shy of the exchange’s feeder cattle index for Aug. 24 at 147.29 cents
Most actively traded September ended down 1.200 cents to 141.800 cents, and October 0.975 cent lower at 138.100 cents.
Technical selling and more cash price weakness pulled down CME lean hogs, said traders.
October ended 1.625 cents per pound lower at 58.700 cents, and December finished 1.575 cents lower at 54.475 cents.
Both contracts closed below their respective 20-day moving average of 59.88 and 55.61 cents.
The government reported Thursday morning’s average cash hog price in Iowa/Minnesota had fallen 73 cents per cwt from Wednesday to $63.00.
Hog and pork demand soared after the Porcine Epidemic Diarrhea virus three years ago shrank hog supplies, said Roose.
“Now we’ve reached a level where we have too big of a supply and too little demand.”
Hogs have become more plentiful as their numbers and animal weights start to rise in parts of the Midwest due to less heat and humidity, which is favorable for raising pigs, a Midwest hog merchant said.
He said hog supplies tend to build around early September as temperatures begin to moderate across most of the Midwest heading into the fall.
