By Theopolis Waters
CHICAGO, Sept 23 (Reuters) – Chicago Mercantile Exchange live cattle futures on Wednesday tumbled to a two-year low, and by their 3-cent per pound daily price limit, amid a seasonal slowdown in beef demand and lower expectations for cash prices this week, traders said.
Spot-October and December respectively closed at 133.225 and 135.750 cents per lb., which are also their new contract lows. CME will expand live cattle’s trading limit to 4.5 cents on Thursday following Wednesday’s limit-down settlement.
Wednesday morning’s wholesale Choice beef price slumped $3.79 to $218.98 per cwt. from Tuesday. Select cuts sagged $1.84 to $214.95, the U.S. Department of Agriculture said.
Market-ready, or cash, cattle bids surfaced in Kansas at $130 per cwt, with no response from sellers, feedlot sources said. No bids or asking prices were reported elsewhere in the U.S. Plains, they said.
Last week, cash cattle sold at $135 to $136 per cwt.
Beef demand is in the midst of a post-Labour Day lull while facing competition from comparatively cheap pork and chicken, said traders.
Fallen beef cutout values trimmed packer margins, but remained in the black due to lower prices paid in recent weeks for record-heavy cattle, they said.
“These guys (feedlots) are caught with heavyweight cattle, and there’s nothing to do but move them at the going price,” said Archer Financial Services broker Dennis Smith.
CME feeder cattle September, which will expire on Thursday, was guided by the exchange’s feeder cattle index for Sept. 21 at 196.91 cents.
Live cattle future’s selloff sank remaining feeder cattle contracts by their 4.5-cent per lb daily price limit, which will be expanded to 6.750 cents on Thursday.
September feeder cattle closed at 194.950 cents per lb, down 0.750 cent. October and November finished at 182.375 and 179.375 cents, their new contract lows.
HOGS SLIP ON CASH, PORK PRICES
Lower cash and wholesale pork values spawned profit-taking that beat back early-session CME lean hog advances, traders said.
Spot-October hogs closed 0.450 cent per lb lower at 70.550 cents, and December down 0.525 cent to 64.225.
Wednesday morning’s wholesale pork price was at $81.77 per cwt, $1.73 lower than on Tuesday, led by the $7.59 drop in pork belly costs, USDA said.
The USDA reported the morning’s Iowa/Minnesota average cash hog price at $68.87 per cwt., down $1.36 from Tuesday in light volume.
Investors were cautious ahead of the government’s quarterly hog report scheduled for release on Friday.
