CHICAGO, March 3 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Thursday, pressured by profit-taking as early-week cash price optimism waned, traders said.
April closed 0.850 cent per lb lower at 135.450 cents, and June ended down 0.300 cent to 125.625.
Packers are dug in with market-ready, or cash, cattle bids in Texas and Nebraska at $136 per cwt, with sellers stubbornly asking $140 to $142, said feedlot sources.
Last week, cattle in the U.S. Plains moved at $133 to $137.
On Tuesday, investors thought packers would pay steady-to-better money than last week for supplies after bidding for them earlier in the week than usual.
Futures’ recent rally, tighter cattle numbers ahead, and increased beef demand for spring cook-outs after Easter fed into initial bullish cash price expectations.
Since then, futures have retreated, wholesale beef prices stumbled and processors are showing little interest in buying cattle before Friday.
The morning’s wholesale choice beef price dropped 28 cents per cwt from Wednesday to $219.77. Select cuts fell 76 cents to $211.17, the U.S. Department of Agriculture said.
“Without any positive news, right now nobody wants to be a hero,” a trader said.
Front-month live cattle market selling dragged CME feeder cattle contracts lower. March closed down 0.700 cent per lb to 157.600 cents.
Technical buying propped up CME’s April lean hog contract, but soft cash hog and wholesale pork values weighed on other trading months, said traders.
April closed up 0.300 cent per lb to 70.350 cents, and above the 10-day moving average of 70.24 cents. May ended down 0.125 cent to 76.775 cents and June closed unchanged at 80.700 cents.
Thursday morning’s average cash hog price in the western Midwest shed 76 cents per cwt from Wednesday in light volume to $62.85, the USDA said.
The morning wholesale pork price on Thursday declined 33 cents per cwt from Wednesday to $75.43, based on government data.
Market participants are wary of the government’s morning direct cash hog price data because it has less packer involvement than the afternoon reports, a trader said.
He said product sales tend to struggle this time of year after end users concluded the bulk of their ham purchases for the Easter holiday on March 27.