CHICAGO, April 5 (Reuters) – U.S. live cattle futures fell to 1 ½ month lows and feeder cattle declined by nearly three percent on Tuesday in a technical selloff triggered by ample supplies and lower beef prices, traders and analysts said.
Live cattle eased their third straight session, briefly falling by the daily limit of US3.000 cents per pound before trimming losses. Cool weather in parts of the United States has kept a lid on seasonal beef demand associated with grilling season.
“We have demand for grilling that’s out there, but we haven’t gotten there yet,” said CHS Hedging analyst Steve Wagner. “Packers have been struggling with (profit) margins.”
Larger losses in beef prices than cattle prices have pushed packer margins deep into negative territory, making the packers reluctant to boost bids for cattle in cash markets. Traders said cattle were likely to trade at similar levels to the $133 per cwt. fetched last week in the southern Plains.
Most-active June live cattle settled 2.925 cents lower at 120.750 per lb., lowest since Feb. 16. May feeder cattle finished down the daily price limit 4.500 cents at 150.200 cents per lb.
Feeders had jumped by their daily price limit on Thursday, when the U.S. Department of Agriculture’s prediction for increased U.S. corn sowings sent prices for the most widely used feed in cattle to their lowest in 9 ½ months.
However, corn has rebounded a portion of its losses last week, weighing on feeder prices that typically move in the opposite direction of corn.
“The fundamentals are very bearish in cattle. We have animal weights 25 lb. over last year and more cattle on feed,” said Ted Seifried, analyst at the Zaner Group.
USDA at midday said wholesale beef prices declined to $217.30 per cwt., lowest in a month, before rising slightly after the close of futures trading to $217.70.
USDA said wholesale pork prices were up $1.07 to $77.60 per cwt.
Lean hog futures were narrowly mixed, with front-month April easing 0.300 cent to 67.375 cents per lb. and most-active June up 0.275 cent to 79.000.
