By Theopolis Waters
CHICAGO, Sept 22 (Reuters) – Chicago Mercantile Exchange live cattle futures on Tuesday quietly slid to their lowest level since late May 2014, pressured by seasonally sluggish wholesale beef demand, traders said.
Global economic worries that sent U.S. stocks tumbling, which triggered selling across various commodities.
Monday’s CME live cattle rally was overdone and were “tethered to the stock market” on Tuesday, said JRS Consulting owner Jack Salzsieder.
Spot-October closed 0.775 cent per pound lower at 136.225 cents, and posted a new contract low of 135.800 cents. December ended down 1.000 cent to 138.750.
Tuesday morning’s wholesale Choice beef price, or cutout, fell 90 cents to $224.64 per hundredweight from Monday. Select cuts dropped 64 cent to $219.51, the U.S. Department of Agriculture said.
Typically, beef demand subsides after Labour Day, the last grilling holiday of the summer, but bottom out around the end of October when sales for other cuts suitable for cooking indoors pick up, traders and analyst said.
Meanwhile, packers will try to control cash spending while coping with heavyweight cattle and fallen cutout values.
Last week, market-ready, or cash, cattle moved at $135 to $136 per cwt.
The government will issue the monthly cold storage report on Tuesday, which will include August beef and pork inventories.
A few analysts, on average, estimated last month’s cold storage total beef stocks at 440.1 mln lb. and pork at 646.4 mln lb.
CME’s September feeder cattle contract was supported by its discount to the exchange’s feeder cattle index for Sept. 18 at 198.04 cents.
Live cattle futures selling and slumping cash feeder prices weighed on the exchange’s remaining feeder cattle trading months.
September feeder cattle closed at 195.700 cents, up 1.000 cents. October ended down 0.800 cent to 186.875, and November 1.175 cents lower at 183.875 cents.
WEAKER HOG FUTURES SETTLEMENT
CME lean hogs posted modest losses, under pressure from outside markets and soft wholesale pork prices, traders said.
Spot-October hogs closed 0.625 cent per lb. lower at 71.000 cents, and December down 0.225 cent to 64.750.
Tuesday morning’s wholesale pork price was at $82.94 per cwt., down 74 cents from Monday, USDA said.
Mixed cash prices and anxiety ahead of Friday’s USDA quarterly hog report kept traders on the defensive, according to traders.
The USDA reported Tuesday morning’s average cash hog price in Iowa/Minnesota at $68.75 per cwt., down 60 cents from Monday, but up 13 cents in the western Midwest to $68.37.
