By Theopolis Waters
CHICAGO, Feb 20 (Reuters) – Chicago Mercantile Exchange live cattle fell Friday on lower cash prices before the U.S. Department of Agriculture’s monthly Cattle-On-Feed report at 2 p.m. CST, traders said.
Analysts expect Friday’s report to show a sizable drop in the number of cattle placed into feedlots last month.
This week, market-ready or cash cattle in Kansas moved at $160 per hundredweight (cwt), $2 lower than last week, feedlot sources said. Nebraska cash cattle sold at $158 to $160, down as much as $4 from a week ago, they said.
CME live cattle losses discouraged packers from spending more for supplies, a feedlot source said.
Tom Tippens, an analyst with West Oak Commodities, said the futures market is faced with strong demand headwinds given extreme weather on the U.S. East Coast and the dock slowdowns on the West Coast.
Talks between dock workers and management continue, brokered by the U.S. labour secretary.
April and June futures fell below their respective 20-day moving average of 150.82 cents and 143.64 cents, which triggered fund liquidation.
February closed 2.225 cents per lower at 156.700 cents per pound, and April 2.975 cents lower at 148.525 cents.
Technical selling and live cattle market losses pressured CME feeder cattle contracts.
March closed 3.375 cents per lb. lower at 199.175 cents, and April down 3.225 cents to 198.350 cents.
HOGS HOLD SOME GAINS
CME lean hogs finished moderately higher, helped by firm cash prices and initial rumors of an agreement to the West Coast port negotiations that were later denied, traders said.
April futures closed up 0.350 cent to 67.400 cents per lb., and May 0.575 cent higher at 77.300 cents.
Friday morning’s average cash hog price in the western Midwest was up 32 cents per cwt from Thursday to $59.46, the USDA said.
Weather-related supply shortages forced packers to spend more for hogs, a trader said. But, investors took profits due to ongoing West Coast delays that are pressuring wholesale pork prices, he said.
Government data showed the morning’s wholesale pork price at $70.84 per cwt., down $1.48 from Thursday.
USDA will also issue the monthly cold storage report at 2 p.m. CST, which could show effects of the West Coast port situation on the meat sector.