By Theopolis Waters
CHICAGO, Feb 10 (Reuters) – Chicago Mercantile Exchange live cattle ended mixed on Tuesday with nearby contracts supported by their discounts to recent cash prices, while back months sagged on forecasts for increased supplies ahead, traders said.
February closed 0.650 cent per pound higher at US159.100 cents, and April up 0.125 cent to 153.775 cents. June ended down 0.150 cent to 145.925 cents, and August 0.675 cent lower at 144.100 cents.
Last week, market-ready or cash cattle in the U.S. Plains sold at $160 to $162.50 per hundredweight (cwt).
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Investors bought nearby months, and simultaneously sold deferred contracts, in the belief that packers will spend at least steady money for cash cattle this week.
Typically, wintry weather and cold temperatures in February tighten cattle supplies, making them less available to processors.
The cash market held up well despite poor packer margins, slack beef demand and labour disruptions at the U.S. West Coast that are limiting meat exports, said KIS Futures vice president Lane Broadbent.
Tuesday morning’s Choice wholesale beef price dipped 3 cents per undredweight from Monday to $238.45. Select cuts rose $1.02 to $233.32, the U.S. Department of Agriculture said.
The day’s beef packer margins were a negative $79.45 per head, compared with a negative $76.25 on Monday and a negative $65.75 per head a week ago, according to Colorado-based analytics firm Hedgersedge.com.
CME feeder cattle dropped on profit-taking, back-month live cattle selling and additional feeder cattle supplies in the coming months.
March closed 1.600 cents per lb. lower at 202.025 cents, and April down 1.550 cents at 201.725 cents.
MIXED HOGS SETTLEMENT
CME lean hogs’ February contract, which will expire on Feb. 13, gained due to its discount to the exchange’s hog index for Feb. 6 at 66.65 cents.
Struggling cash and wholesale pork prices pressured April futures that will become the new lead month after February expires.
February closed up 0.250 cent per lb. to 61.525 cents, and April down 0.175 cent to 66.575 cents.
The morning’s average cash hog price in Iowa-southern Minnesota fell $1.30 per cwt. from Monday to $59.29, USDA said.
Separate government data showed the morning’s wholesale pork price at $71.71 per cwt, $1.99 lower than on Monday.
Packers are snug on inventory for the rest of the week, while trying to clear a backlog of pork, partly caused by the slowdown of U.S. exports on the West Coast, a trader said.
