CHICAGO, Ill. (Reuters) — Chicago Mercantile Exchange live cattle fell on Wednesday for the first time in seven days as investors took profits, but sharply higher wholesale beef values minimized losses, traders said.
April closed down 0.275 cents per pound to 161.725 cents, and June 0.675 cents lower at 152.375 cents.
The morning’s choice wholesale beef price surged $3.55 per hundredweight from Tuesday to $250.38. Select cuts climbed $2.79 to $247.57, the U.S. Department of Agriculture said.
Grocers competed for beef after packers trimmed production to improve margins and rein in cash spending, traders and analysts said.
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From Monday to Wednesday, packers processed 16,000 fewer cattle than last week at 311,000 head, according to USDA data.
So far, there is no word from packers after feedlots in Kansas and Texas priced market-ready or cash cattle up to $167 per cwt., said industry sources. Last week, cash cattle in the U.S. Plains traded at $163 to $165.
Strong cash feeder cattle prices underpinned the CME feeder cattle March contract that will expire on Thursday.
Remaining feeder cattle months were pressured by sell stops and live cattle futures weakness.
March closed up .525 cents per lb. to 217.700 cents, April down 1.675 cents to 217.250 cents and May finished 1.900 cents lower at 215.975 cents.
CME lean hogs April and May contracts settled higher after a choppy session, supported by short-covering and an uptick in cash prices, traders said.
The morning’s average hog price in Iowa/Minnesota was $56.44 per cwt., up 11 cents from Tuesday, according to the USDA.
Declining hog weights from last year’s highs suggest supplies may be tightening, which might improve cash prices, but help is needed from the product side, a trader said.
Separate government data showed the morning’s wholesale pork price had dropped 79 cents per cwt. from Tuesday to $67.02.
Deferred-month investors exercised caution ahead or Friday’s USDA quarterly hog report.
“I expect the hogs (futures) to go into this hog report not far from their contract lows. I think it’s going to be a pretty negative supply report,” said Archer Financial Services broker Dennis Smith.
April closed 1.225 cents per lb. higher at 59.825 cents, and May up 0.375 cents to 66.525 cents. June finished down 0.075 cents at 74.600 cents and July 0.100 cents weaker at 75.150 cents.
