CHICAGO, March 30 (Reuters) – Chicago Mercantile Exchange live cattle futures fell sharply on Wednesday, rattled by technical selling on the eve of the last trading day for the quarter, traders said.
April live cattle ended 2.500 cents per lb lower at 132.350 cents, and June closed 2.450 cents lower at 123.075. Both contracts settled below their respective 100-day moving averages of 133.78 and 124.26 cents.
“We (futures) had a huge long fund position, so we broke through support on the downside,” said A&A Trading Inc broker Jim Clarkson.
Futures were further pressured by lethargic wholesale beef demand at a time when backyard barbecues begin heating up for outdoor cook outs.
Read Also
Entomologist tests trap crops and marigolds to repel flea beetles at an Ag in Motion
An Agriculture Canada entomologist is experimenting with trap crops and marigolds at an Ag in Motion demonstration cropplot
The morning’s wholesale choice beef price, or cutout, fell $2.48 per cwt from Tuesday to $222.58. Select cuts tumbled $3.53 to $213.31, the U.S. Department of Agriculture said.
Packers have yet to bid for market-ready, or cash, cattle priced at $138 per cwt in Texas and Kansas. Last week, U.S. Plains cash cattle moved at $136.
Judging by the actions of futures and the cutout, $2 per cwt lower cash prices would not be out of the question, a trader said.
CME cattle and hog futures investors await the U.S. Department of Agriculture’s annual planting intentions and quarterly grain stocks reports due on Thursday. The data could have feed implications for livestock.
Analysts polled by Reuters expected increased U.S. sowings of corn and soybeans.
Sell stops and live cattle future’s steep declines sent CME feeder cattle sharply lower. April closed 3.500 cents per lb lower at 152.575 cents.
Fund selling and spillover cattle market pressure weighed on CME lean hogs, traders said.
April closed 1.325 cents per lb lower at 68.925 cents, and below the 200-day moving average of 69.09 cents. May ended 1.575 cents lower at 77.275 cents, and beneath the 40-day moving average of 77.30 cents.
Market losses mounted after some packers paid less for supplies after buying all they need for this week’s production, said traders.
Government data on Wednesday morning showed the afternoon average cash hog price in Iowa/Minnesota at $62.66 per cwt, 66 cents lower than on Tuesday.
Nonetheless, market bulls were encouraged by the recent rise in wholesale pork prices as spring grilling gets underway.
The morning wholesale pork price on Wednesday was up 52 cents per cwt from Tuesday to $76.84, according to USDA.
