CHICAGO, May 24 (Reuters) – Chicago Mercantile Exchange live cattle futures are falling sharply on Wednesday, hit by fund liquidation and Tuesday’s wholesale beef price retreat, said traders.
* At 10:29 a.m. CDT June was down 1.950 cents per pound to 121.125 cents. August was 2.350 cents lower at 118.950 cents, and below the 10-day moving average of 120.075 cents.
* Tuesday afternoon’s average wholesale beef price slumped $2.14 per cwt to $245.74 from Monday. Select cuts sagged $1.66 to $221.17, the U.S. Department of Agriculture said.
* Grocers bought nearly all the beef they need for U.S. Memorial Day holiday grilling promotions, said traders and analsyts.
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* They said packers might resist bidding up for supplies given weaker beef cutout values and holiday plant closures.
* Roughly 26,000 fewer for sale this week, lighter animals weights and triple-digit packer profits may minimize potential cash price weakness.
* Investors look to Wednesday morning’s Fed Cattle Exchange sale of about 2,600 animals for cash price direction. Last week’s average top price there was $135.16 per cwt.
* Last week market-ready, or cash, cattle in the U.S. Plains changed hands at $133 to $135 per cwt.
* Market participants await USDA’s monthly Cattle-On-Feed report on Friday.
FEEDER CATTLE – May, which will expire on Thursday, was down 0.575 cent per pound to 143.675 cents. Most actively-traded August was 3.900 cents lower at 147.600 cents.
* CME May feeder cattle tracked the exchange’s feeder cattle index for May 22 at 143.27 cents.
* Technical selling and sharply lower live cattle futures sank other trading months.
LEAN HOGS – June was 0.750 cent per pound higher at 80.900 cents, and hit a new contract high of 80.950 cents. July up 0.700 cent to 80.725 cents, and marked a new high of 80.850 cents.
* CME lean hogs drew strength from Tuesday’s strong cash and wholesale pork prices, said traders.
* They said investors bought hog futures and simultaneously sold live cattle contracts in a trading practice known as spreading.
* Positive margins and good pork demand encouraged some packers to raise cash bids to make sure they have supplies for Saturday’s kill, before closing plants for Monday’s holiday, analyst said.
* He said other processors bought enough hogs in advance of what could be a huge post-holiday Saturday slaughter.
* Grocers are topping off meat inventories heading into the three-day holiday weekend, a trader said.
