CHICAGO, March 17 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Thursday, weakened by profit-taking as investors wait for market-ready, or cash, cattle to change hands by Friday, traders said.
Some traders also positioned themselves for Friday’s U.S. Department of Agriculture monthly Cattle-On-Feed report.
April live cattle ended 0.400 cent per lb lower at 141.150, and June closed down 0.050 cent to 130.700.
Packers in Texas and Kansas bid $137 per cwt for cash cattle, $1 less than last week’s sales. Feedlots this week priced animals at more than $142.
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Less cattle for sale, profitable packer margins and brisk early spring grilling demand fueled higher cash price expectations.
But, some traders worried that mixed, rather than higher, wholesale beef values might cause some packers to rein in cash spending.
“Market watchers will be eyeing the beef cutout value carefully, looking for an indication that another pull-back there could slow what’s been quite an uptrend so far this month,” said Cassandra Fish, author of industry blog The Beef.
The morning’s wholesale choice beef price, or cutout, increased 21 cents per cwt from Wednesday to $234.13. Select cuts declined 84 cents to $222.84, the USDA said.
Thursday’s estimated average beef packer margin was $50.70 per head, up from $29.00 on Wednesday, as calculated by HedgersEdge.com.
Modest CME live cattle futures losses pressured feeder cattle contracts. March closed 0.725 cent per lb lower at 163.725 cents.
CME lean hogs ended steady to firm after speculative buying offset bearish market fundamentals, said traders.
Last December’s USDA quarterly hog report implied smaller slaughters around this time of year, but that remains to be seen, a trader said.
April closed unchanged at 71.300 cents. May ended 0.225 cent per lb higher at 79.575 cents and June closed up 0.050 cent to 83.800 cents.
Wholesale pork early Thursday fell 64 cents per cwt from Wednesday to $76.17, the USDA said.
Thursday morning’s average cash hog price in Iowa/Minnesota dropped 61 cents per cwt from Wednesday to $63.01, the USDA said.
Packers need fewer hogs heading into the Good Friday holiday-shortened workweek, said traders and Midwest hog buyers.
At least one Midwest packing plant was closed on Thursday, and possibly on Friday, for scheduled repairs, dealers said.
On Thursday, packers processed an estimated 382,000 hogs, 54,000 less than a week earlier, according to the USDA.
