CHICAGO, Feb 5 (Reuters) – Chicago Mercantile Exchange live cattle contracts closed lower on Friday, weighed by cash price caution and heavy U.S. stock market losses, traders said.
The day’s firm U.S. dollar and the plunge in equities tied to disappointing jobs data pulled most commodity prices lower, they said.
Altin Kalo, an analyst with Steiner Consulting Group, attributed some of the CME live cattle selling to “a waiting game” for market-ready, or cash, cattle to change hands later on Friday.
Packers in Texas and Kansas bid $138 per cwt for cash cattle, which was in line with last week’s sales, said feedlot sources. They said sellers asked up to $142.
The morning’s soft beef cutout value and poor packer margins may keep a lid on cash prices in parts of the region, said analysts and traders.
They said this week’s blizzard in the central Plains disrupted livestock production and temporarily closed some packing plants, which could lend support to cash values in hardest hit areas.
However, they added that cash prices next week may suffer if those plants are unable to process enough cattle on Saturday to make up for weather-related downtime.
The U.S. Department of Agriculture estimated Saturday’s cattle slaughter at 35,000 head, up from 18,000 last week.
The morning’s wholesale choice beef price dropped 53 cents per cwt from Thursday to $222.50. Select cuts slipped 3 cents to $218.45, the USDA said.
February live cattle closed 1.025 cents per lb down to 136.050 cents, and April ended 1.250 cents lower to 134.400 cents.
CME live cattle losses sank the exchange’s feeder cattle futures. March finished 2.700 cents per lb lower at 153.825.
Investors sold the February CME lean hog contract, which will expire on Feb. 12, and bought April, traders said.
Spot February ended 0.325 cent lower at 64.800, and April ended up 0.050 cent to 70.300 cents.
Investors also bought April in anticipation of tighter supplies when meat demand for spring grilling is expected to heat up, a trader said.
On Monday morning, packers in the Midwest paid steady to 50 cents per cwt more for hogs before Saturday’s USDA-estimated 200,000-head kill, said dealers.
They said retailers have most of the pork needed to feature in the near term, while awaiting sales during the early arrival of Lent this year.
The morning wholesale pork price on Friday gained 34 cents per cwt from Thursday to $76.86, USDA said.