By Theopolis Waters
CHICAGO, Oct 24 (Reuters) – Chicago Mercantile Exchange live cattle futures settled lower on Friday, pressured by profit-taking ahead of the U.S. Department of Agriculture’s monthly Cattle-On-Feed report, traders said.
Most analysts expect Friday’s report at 2 p.m. CDT to show placements of cattle in U.S. feedyards likely grew last month compared with a year ago.
Nervous CME live cattle market bulls pocketed profits after digesting this week’s record-high cash prices and in response to lower wholesale beef values.
This week, market-ready or cash cattle in the U.S. Plains traded at mostly $170 per hundredweight (cwt), $6 higher than last week and surpassed the July top of $166 in some areas.
Friday morning’s choice wholesale beef price slumped $2.39 per cwt from Thursday to $247.04. Select fell $1.10 to $232.44, according to USDA.
Packers were short on cattle and unable to pass on higher costs to grocers who are eyeing cheaper pork and chicken versus more expensive beef, a trader said.
Beef demand typically tapers off this time of year as hams and turkeys gain greater visibility for the winter holidays, he said.
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Sell stops were triggered after back-month live cattle contracts drifted below Thursday’s lows.
CME Group will reduce electronic trading hours for its livestock markets effective Monday, Oct. 27.
October closed 0.800 cent per lb lower at 168.250 cents, and December 2.200 cents lower at 166.900 cents.
Profit-taking, live cattle futures losses and technical selling pulled down CME feeder cattle futures.
October closed down 2.325 cents to 237.900 cents per lb, and November 2.050 cents lower at 234.650 cents.
SHORT-COVERING LIFTS HOGS
CME lean hogs settled higher, supported by short-covering and futures’ discounts to the exchange’s hog index for Oct. 22 at 102.40 cents, traders said.
December finished up 1.525 cents to 90.250 cents per lb, and February 1.425 cents higher at 88.875 cents.
Futures made headway despite continued bearish market fundamentals pegged to the seasonal buildup in hog supplies.
USDA’s Friday morning direct cash hog prices were unavailable. Hogs in the Midwest traded 50 cents to $1 per cwt lower, according to regional hog dealers.
U.S. government data showed Friday morning’s wholesale pork price down $2.34 per cwt from Thursday to $98.20.
