CHICAGO, Sept 27 (Reuters) – Chicago Mercantile Exchange live cattle futures on Tuesday slumped, with nearby contracts down the 3-cents per pound daily price limit, rattled by fund selling and uneasiness before cash prices by Friday, said traders.
October and December settled down by the 3-cents limit to 103.825 and 103.125 cents, respectively. Live cattle’s trading limit will be expanded to 4.5 cents on Wednesday.
Packers on Tuesday bid $104 per cwt for slaughter-ready, or cash, cattle in Texas and Kansas that were priced at $110, said feedlot sources. Last week, cash cattle fetched roughly $105 per cwt.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Futures’ two-day slide and 30,000 more cattle for sale than last week may work against cash prices, said analysts and traders. They said some packers might soon cut slaughter rates to maintain their substantial margins and stimulate wholesale beef demand.
“Wholesale beef buying will likely be minimal with this being the last week of the month and October National Pork Month is on the horizon,” said Doane Advisory Services economist Dan Vaught.
Tuesday morning’s choice beef price jumped $1.74 per cwt from Monday to $188.78. Select cuts rose 47 cents to $180.12, the U.S. Department of Agriculture said.
Average beef packer margins for Tuesday were a positive $85.05 per head, up from a positive $55.50 on Monday, as calculated by HedgersEdge.com.
CME live cattle futures’ selloff and $5 to $8 per cwt lower cash feeder cattle prices sank the exchange’s feeder cattle market.
Most-actively traded October closed 4.200 cents per pound lower at 126.850 cents. November settled down by the 4.5-cent per pound daily price limit to 123.375 cents.
Bearish market fundamentals and active CME live cattle market selling pressed the exchange’s lean hog contracts to a 10-month low for a second straight day, traders said.
October closed 1.350 cents per pound lower at 51.700 cents, and posted a fresh contract low of 51.500 cents. December ended down 2.150 cents to 46.450 cents and made a new low of 46.275 cents.
Tuesday morning cash prices in the U.S. Midwest were steady to $1 per cwt lower as supplies grow seasonally, said regional hog merchants.
They said pork cut values retreated after most grocers bought all they need for October Pork Month.
Tuesday morning’s USDA data showed the wholesale pork price fell $1.04 per cwt from Monday to $77.57.
Investors await USDA’s quarterly hog report on Friday at 2 p.m. CDT (1900 GMT).
