By Theopolis Waters
CHICAGO, Nov 16 (Reuters) – Chicago Mercantile Exchange live cattle futures finished Monday’s session down by their 3-cents per pound daily price limit after late Friday’s cash prices fell short of expectations, traders and analysts said.
Spot December finished at 127.675 cents per lb., and February at 129.650 cents. Live cattle’s trading limit will be expanded to 4.5 cents on Tuesday.
“I don’t know what will stop this rout down the abyss,” said Oak Investment Group president Joe Ocrant, citing futures’ recent retreat and Friday’s cash price weakness.
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U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
Last Friday, packers paid US$126 to $129 per hundredweight (cwt.) for market-ready, or cash, cattle in the U.S. Plains, as much as $5 lower than the previous week, said feedlot sources.
Processors reduced slaughter and curbed cash spending to grow their margins. They hope to reinvigorate wholesale beef demand, which has suffered from active turkey advertisements for American Thanksgiving, traders said.
Monday morning’s wholesale Choice beef price gained 47 cents per cwt. from Friday to $209.77. Select cuts fell 81 cents to $109.24, based on U.S. Department of Agriculture data.
Separate USDA estimates showed packers on Monday processed 106,000 head of cattle, 5,000 less than a week ago.
The average beef packer margin for Monday was a negative $38.08 per head, compared with a negative $17.15 on Friday, as calculated by HedgersEdge.com.
Deep live cattle market losses and the lower cash feeder cattle price outlook pulled CME feeder cattle futures lower, with spot November closing at 172.300 cents, down 2.775 cents.
LIMIT-DOWN HOG SETTLEMENT
CME lean hogs closed down their 3-cents per lb daily price limit to a six-year low on falling cash prices and spillover live cattle market pressure, traders said.
Spot December and February ended at 51.800 cents and 54.050 cents, respectively.
Cash hog prices in Iowa-Minnesota on Monday morning fell 67 cents per cwt. from Friday to $51.83, posting two days of declines after Thursday’s modest uptick, according to USDA.
“There are plenty of hogs considering last week’s record-high pork output and the biggest weekly kill so far this year,” a trader said.
The government estimated Monday’s hog slaughter at 438,000 head, 8,000 more than last week during the same period.
