CHICAGO, Aug 26 (Reuters) – Chicago Mercantile Exchange live cattle futures on Friday racked up losses for a tenth session in a row, on plentiful supplies that softened wholesale beef values and this week’s cash prices, traders said.
Futures losses accelerated after October and December filled a key technical chart gap between the July 22 high and the July 25 low, traders added.
August live cattle ended down 2.125 cents per pound to 110.350 cents. Most actively traded October closed 2.175 cents lower at 106.350 cents.
This week packers bought market-ready, or cash, cattle at mostly $115 per cwt, down $2 to $3 from a week ago, said feedlot sources.
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U.S. livestock: Cattle futures fall back ahead of cattle on feed report
Chicago live and feeder cattle futures fell back on Thursday ahead of Friday’s cattle on feed report. Hogs were mixed.
The morning’s choice beef price dropped 63 cents per cwt from Thursday to $199.73. Select cuts slipped 12 cents to $194.03, according to U.S. Department of Agriculture (USDA) data.
“There’s just a better supply out there than people are anticipating,” said American Restaurant Association chief analyst David Maloni.
The government estimated this week’s cattle slaughter at 600,000 head, or 47,000 more than the same period a year ago.
Profitable margins are encouraging packers to process as many animals as possible, which in turn has deterred retail meat buying at higher prices.
Chart-related selling and live cattle market losses dropped CME feeder cattle. September ended 1.875 cents per pound lower at 139.925 cents.
Short-covering a technical buying helped CME lean hogs halt a three-day losing skid, said traders.
October ended 2.625 cents per pound higher at 61.325 cents, and December finished 2.150 cents higher at 56.625 cents.
Both contracts landed above their 10-day moving averages of 60.80 and 56.38 cents, respectively.
Futures’ discounts to the exchange’s lean hog index for Aug. 24 at 67.04 cents stirred more buying, despite continued bearish market fundamentals.
Friday morning’s Midwest cash hog prices were mostly 50 cents per cwt lower, said regional hog merchants.
The morning’s wholesale pork price declined 22 cents per cwt to $76.31 from Thursday, the USDA said.
“Hog weights are not overly heavy, but there’s just a lot of them,” an Indiana merchant said.
USDA estimated this week’s hog kill at 2.266 million head, 41,000 more than a year ago.
Cooler temperatures in parts of the Midwest has caused hogs to grow quicker, another hog merchant said.
He added that lower-trending cash prices for more than a month prompted farmers to send hogs to market earlier than they had planned.
