CHICAGO, Aug 18 (Reuters) – Chicago Mercantile Exchange live cattle futures finished lower for a fourth straight session on Thursday, saddled by fund liquidation after slipping below technical support levels, traders said.
August live cattle ended 1.175 cents per pound lower at 113.575 cents. October closed 1.825 cents lower at 110.575 cents and below the 40-day moving average of 112.36 cents.
Futures were unable to hold onto early-session gains despite their sizable discounts to preliminary cash prices.
So far this week, market-ready, or cash, cattle in the U.S. Plains moved at $116 to $118 per cwt, compared with $118 to $119 a week ago, said feedlot sources.
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Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
Investors lacked confidence that processors would pay more for unsold cattle than last week, based on future’s recent losing streak and more animals for sale.
Furthermore, packers were also having difficulty convincing grocers to buy significant amounts of beef at higher costs for Labor Day grilling demand when there is plenty of pork and chicken available.
The morning’s choice beef price dropped 83 cents per cwt from Wednesday to $200.92. Select cuts were $1.55 higher at $194.68, the U.S. Department of Agriculture said.
Market participants adjusted positions in advance of USDA’s monthly Cattle-On-Feed report on Friday.
Technical selling and live cattle futures’ retreat pulled down CME feeder cattle contracts. August feeders closed 1.700 cents per pound lower at 145.025 cents.
Profit-taking and lower cash and wholesale pork prices weighed on CME lean hogs, said traders.
October ended down 0.300 cent per pound to 60.700 cents, and December finished 0.300 cent lower at 56.450.
“My guess is we’re going to taper off and close very poor tomorrow because I don’t see anything that’s stacking up very positive at all,” said Archer Financial Services broker Dennis Smith.
Thursday morning’s wholesale pork price, or cutout, dropped $1.46 cents per cwt to $72.90 from Wednesday, with reduced prices for all categories except ribs, the USDA said.
The government reported Thursday morning’s average cash hog price in Iowa/Minnesota sagged 99 cents per cwt from Wednesday to $64.18 in light sales volume.
Abundant supplies have given some packers all the hogs they need for what is expected to be a potential 140,000-plus Saturday hog slaughter, a trader said.
He said increased hog numbers and large amounts of pork in storage periodically pressured wholesale pork values.
