CHICAGO, Dec 1 (Reuters) – Chicago Mercantile Exchange live cattle futures on Thursday peaked at a three-month high before profit-taking dropped contracts to near session lows, said traders.
December live cattle closed down 0.175 cent per pound to 110.575 cents, and February ended 0.575 cent lower at 111.375 cents.
CME live cattle futures receded in spite of this week’s stronger-than-expected prices for market-ready, or cash, cattle and much improved wholesale beef demand.
People are not confident that beef demand is going to hold given the availability of cheap poultry and pork, said U.S. Commodities analyst Don Roose.
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Packers this week paid $114 to $115 per cwt for cash cattle in the U.S. Plains that last week brought $110 to $113, according to feedlot sources and the U.S. Department of Agriculture.
Most of the animals sold at Wednesday morning’s Fed Cattle Exchange fetched mostly $111.50 to $113.25 per cwt versus up to $109.75 there a week earlier.
Thursday morning’s choice wholesale beef price fell 43 cents per cwt from Wednesday to $189.52. Select cuts were up 21 cents to $172.98, the USDA said.
CME feeder cattle traded in sympathy with weaker live cattle futures. January feeders ended 0.650 cent lower at 127.775 cents.
Investors pocketed profits in CME’s lean hog market, prompted by cash price jitters and futures’ premiums to the exchange’s hog index for Nov. 29 at 48.22 cents, said traders.
They said nearby hog contracts drifted below key technical support levels which triggered sell stops and fund liquidation.
December closed down 0.800 cent per pound to 50.225 cents, and below the 100-day moving average of 50.719 cents. Most actively-traded February ended 1.150 cents per pound lower at 54.075 cents and under the 20-day moving average of 54.570 cents.
“Cash prices are mildly moving up, but futures’ premiums are too big,” said Roose.
Thursday morning’s average cash hog price in Iowa/Minnesota gained 9 cents per cwt from Wednesday in light volume to $44.06, the USDA said.
Processors upped cash bids for five straight sessions to capitalize on extremely profitable margins while encountering supply headwinds for post-Thanksgiving production.
“Packers want to gobble up all the hogs they can because of fairly robust pork demand and extremely favorable margins,” a Midwest hog merchant said.
The morning’s wholesale pork price on Thursday jumped $1.09 per cwt from Wednesday to $74.41, the USDA said.
