By Theopolis Waters
CHICAGO, Oct 9 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Thursday, off an earlier record high, pressured by profit-taking following Wall Street’s tumble, traders said.
U.S. stock markets fell nearly two percent on concerns over the pace of economic growth.
Consumer caution about the economy could hurt demand for U.S. goods, including beef.
October live cattle closed down 2.100 cents per pound to 164.000 cents, and December 2.175 cents lower at 165.875 cents.
Before Thursday, CME live cattle notched record highs three straight sessions on fund buying and anticipation of strong prices for slaughter-ready, or cash, cattle this week.
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“A lot of guys are talking about a blow off top here, thinking this market has gotten as high as it’s going to get, and we’re trading on a little bit of emotion,” said KIS Futures vice president Lane Broadbent.
Even so, he said the futures market is drawing support from the possibility of continued higher prices on the cash market.
Feedlots in the U.S. Plains priced cash cattle at $165 per hundredweight (cwt.) or more, with no bids from packers, feedlot sources said. Last week, cash cattle in the Midwest sold mostly at $162.
Futures’ recent rally and improved beef packer margins, thanks to upward trending wholesale beef cutout values, generated cash price optimism.
Thursday morning’s choice wholesale beef price, or cutout, rose 58 cents per cwt. from Wednesday to $247.13. Select was up 53 cents to $235.01, the U.S. Department of Agriculture said.
Fund selling developed after December drifted below the 10-day moving average of 165.53 cents.
CME feeder cattle futures closed lower on profit-taking and live cattle market liquidation.
October closed 0.675 cent per lb. lower at 241.650 cents, and November 1.400 cents lower at 241.525 cents.
HOGS FINISH MIXED
CME lean hogs ended mixed after investors sold deferred contracts and simultaneously bought nearby contracts tied to their discounts to the exchange’s hog index at 110.46 cents.
October hogs closed 1.375 cent per lb. higher at 109.500, and December up 0.450 cent to 95.625 cents. February finished down 0.350 cent to 92.050 cents, and April at 92.000 cents, 0.325 cent lower.
Market activity was quiet as investors awaited clear direction from cash hog and wholesale pork prices, traders said.
Some packers need hogs for the rest of this week, while others look to expanded seasonal supplies to keep a lid on cash prices.
USDA data showed Thursday morning’s average hog price in the western Midwest down $1.92 per cwt. from Wednesday to $106.20 in thin volume.
Separate government data quoted the morning’s wholesale pork price down $1.09 per cwt. from Wednesday to $122.44.
