CHICAGO, June 10 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Friday, hit by fund selling and caution while awaiting market-ready, or cash, cattle prices by day’s end, said traders.
June live cattle closed down 0.750 cent per lb to 122.450 cents, after drifting below the 100-day moving average of 122.71 cents. August was 1.500 cents lower at 117.350 cents and finished under the 10-day moving average of 117.48 cents.
Packers in the southern U.S. Plains upped cash cattle bids to $128 per cwt from mostly $125 earlier this week, said sources at feedlots that are asking at least $130. Last week, cash cattle in the Plains sold at $124 to $132.50.
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Some investors looking for better cash prices than last week point to highly-profitable packer margins, improved wholesale beef demand and the fact that packers raised cash bids.
Contrarians contend Friday’s market selloff may have undermined cash price confidence.
The morning’s choice beef price was at $226.98 per cwt, up 13 cents from Thursday. Select cuts rose 88 cents to $203.72, the U.S. Department of Agriculture said.
Beef packer margins for Friday, on average, were a positive $60.55 per head, up from a positive $46.75 on Thursday, as calculated by HedgersEdge.com.
A trader said concerns about hot weekend weather slowing down cattle weights and hurting meat demand may be overblown.
“It (heat) is only supposed to last a short time. And some people are looking forward to warmer weather so they can start grilling,” he said.
Live cattle futures selling toppled CME feeder cattle contracts. August closed down 1.750 cents per lb to 145.550 cents.
Wholesale pork price weakness and uneasiness about cash prices pressured CME lean hogs, traders said.
Friday morning’s wholesale pork price dropped 87 cents per cwt from Thursday to $86.63 per cwt, USDA said.
Government data on Friday showed the morning average cash hog price in the western Midwest tumbled $2.03 per cwt from Thursday to $78.19 in light sales volume.
Packers may cut kills to offset tight seasonal supplies, improve their margins and lift wholesale pork prices, traders and Midwest hog dealers said.
Investors were also nervous about futures’ wide premiums to the exchange’s hog index for May 8 at 79.76 cents.
Spot June, which will expire on Tuesday, closed down 0.400 cent per lb to 82.275 cents, and July ended 0.325 cent lower at 85.700 cents.
