By Theopolis Waters
CHICAGO, May 11 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Monday, paring early advances, after funds sold or rolled their June positions and bought deferred months, traders said.
Funds trading in CME’s live cattle and hog markets shifted June long positions further back in a procedure known as the “roll” by followers of the Standard & Poor’s Goldman Sachs Commodity Index.
Monday was the third of five days for the roll process.
Sellers outnumbered buyers despite futures’ discounts to last week’s prices for market-ready or cash cattle.
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Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
This week, more cattle are available after processors recently cut kills and drew from cattle contracted against the futures market, traders and analysts said.
Reduced slaughters slowed the flow of beef to wholesale meat buyers, they said.
Monday morning’s Choice wholesale beef price was up $1 per cwt from Friday to $259.12 per cwt. Select cuts jumped $1.53 cents to $248.35, the U.S. Department of Agriculture said.
June ended 1.250 cents lower at 150.250 cents per pound, and August down 1.025 cents to 148.800 cents.
CME feeder cattle May futures drew support from firm cash feeder cattle prices.
Remaining contracts were pressured by the exchange’s live cattle market losses.
May closed 0.900 cent per lb. higher at 216.775 cents, August down 0.200 cent to 217.425 cents and September 0.275 cent lower at 216.450 cents.
HOG FUTURES SAG
CME lean hogs settled weaker, partly due to funds who implemented the S&PGSCI roll, traders said.
“We’re getting the roll and that’s really what’s pressing the market,” said hog futures trader Bill Cipolla.
May hogs closed down 0.150 cent per lb. to 80.700 cents per lb, and June 0.550 cent lower to 84.275 cents.
May futures are nearly in line with Iowa-Minnesota cash prices heading into its Thursday expiration.
The government reported Monday morning’s average cash hog price in Iowa-Minnesota up $1.37 per cwt from Friday to $80.53.
To offset higher cash prices, processor curbed production which lifted wholesale pork values, a trader said.
Separate government data quoted the Monday morning’s wholesale pork price at $80.82 per cwt, $1.25 higher than on Friday.
Back-month premiums’ to cash prices, and the exchange’s hog index for May 7 at 77.14 cents, deterred would-be buyers.
