By Theopolis Waters
CHICAGO, Jan 29 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Thursday, pressured by profit taking before the last trading day of the month on Friday, traders said.
Earlier, February and April triggered sell stops and fund liquidation after falling below the 10-day moving average of 152.95 cents and 151.05 cents, respectively.
CME live cattle ended off session lows in response to better-than-expected cash prices given recent futures losses, unprofitable packer margins and slack wholesale beef demand.
On Thursday morning, cash cattle in Texas and Kansas sold at $159 to $160 per hundredweight (cwt), steady to down $1 from last week, said feedlot sources.
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Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
They said packers in Nebraska paid up to $160.50 per cwt. for supplies, steady to up $1.50 from a week ago in the state.
The afternoon’s Choice wholesale beef price sagged $2.70 per cwt from Wednesday to $244.59. Select dropped $2.00 to $238.34, the USDA said.
Packers needed cattle after not buying enough of them last week with the belief that futures would be sharply lower again, said David Hales, author of the Hales Cattle Letter.
Beef demand on the U.S. North Atlantic states is expected to improve as the region recovers from a blizzard that dented meat sales.
Investors await USDA’s semi-annual cattle inventory report on Friday.
February closed 0.425 cent per lb. weaker at 153.525 cents, and April 1 cent lower at 150.500 cents.
Profit-taking and CME live cattle futures losses pressured feeder cattle contracts.
January, which expired at noon CST, settled down 0.050 cent per lb. to 212.400 cents. March ended 0.775 cent lower at 203.575 cents.
HOGS DROP ON PORK PRICES
CME lean hogs closed sharply lower on profit-taking following lower wholesale pork prices, traders said.
February closed 2.975 cents per lb. lower at 68.550 cents, and April down 1.750 cents to 73.200 cents.
USDA data showed the afternoon’s wholesale pork price had fallen $2.03 per cwt. from Wednesday to $78.30.
Packers slashed wholesale pork prices to clear an inventory backlog caused by the West Coast port congestion and a snow storm in the U.S. North East region, an analyst said.
Some processors raised cash bids to carry hogs into early next week, he said.
Thursday afternoon’s average cash hog price in the western Midwest region was up 36 cents per cwt from Wednesday to $67.38, the USDA said.
Sells and technical selling hastened futures’ losses.
