CHICAGO, Ill. (Reuters) — Chicago Mercantile Exchange live cattle futures ended moderately lower today after a choppy session in which anticipation of lower cash prices overtook sporadic short-covering, traders said.
December closed 0.400 cents per pound lower at 166.450 cents, and February down 0.150 cents at 166.975 cents.
Packers curtailed production to stabilize their falling margins and lift wholesale beef prices, which may pressure market-ready or cash prices for this week.
Processors in Kansas hiked cash bids from $166 to as much as $168 per hundredweight versus up to $175 asking prices there and elsewhere in the U.S. Plains, feedlot sources said. Last week, cash cattle moved at mostly $172 to $173.
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Thursday morning’s choice wholesale beef price dropped $1.46 per cwt. from yesterday to $254.95. Select fell 81 cents to $240.97, the U.S. Department of Agriculture said.
Today’s beef packer margins were a negative $120.55 per head, compared with a negative $120.70 yesterday, according to Colorado-based analytics firm Hedgersedge.com.
Short-covering and futures’ discounts to last week cash prices may land some contracts in positive territory on Friday, traders and analysts said.
CME nearby feeder cattle contracts drew support from short-covering and futures’ discounts to the exchange’s feeder cattle index for Tuesday at 244.99 cents.
Higher corn prices dropped deferred feeder cattle contracts.
January ended 1.125 cents per lb. higher at 235.950 cents, and March rose 0.150 cents to 232.050 cents. April and May closed down 0.300 cents to 232.550 cents and 232.600 cents, respectively.
CME lean hogs declined for a fifth straight session in anticipation of weaker prices for slaughter-ready, or cash, livestock, traders said.
December closed 0.425 cents per lb. lower at 87.625 cents, and February fell 0.250 cents to 86.625 cents.
This morning’s average cash hog price in the western Midwest region slumped $1.80 per cwt. to $84.07.
Packers lowered their bids for cash hogs after topping off inventories for this week’s production while trying to conserve their thinner margins.
Hedgersedge.com. calculated today’s pork packer margins at a positive $5.45 per head, compared with a positive $4.50 yesterday.
The cash situation and uncertain pork demand mostly affected the February contract, which will be the new lead month after December futures expire on Dec. 12, a trader said.
Nearby trading months drifted below yesterday’s lows, which triggered sell stops, he said.
