By Theopolis Waters
CHICAGO, Feb 21 (Reuters) – Chicago Mercantile Exchange live cattle ended lower on Friday, weighed down by profit-taking ahead the U.S. Department of Agriculture’s Cattle On Feed Report, analysts and traders said.
“We had an extremely volatile session today, likely because of positioning ahead of the cattle report,” said Joe Ocrant, president of Oak Investment Group.
CME live cattle at times drew support from higher cash cattle returns and gains in wholesale beef prices.
The bulk of cash cattle in Texas moved at $145 per hundredweight (cwt), up $3 from last week, feedlots sources said. They said Kansas cattle traded lightly at $144, $2 higher than a week ago.
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Fewer cattle available for sale this week, which supported wholesale beef values, forced packers to spend more for supplies, traders said.
Friday morning’s wholesale choice beef price was $214.78 per cwt., up 46 cents from Thursday. Select cuts also gained 46 cents to $211.82, according to the USDA.
February live cattle closed down 0.050 cent per pound to 144.550 cents. It peaked at a new contract high of 145.150 cents in electronic trading
April ended 0.425 cent lower at 141.450 cents.
Profit taking and live cattle futures selling undercut CME feeder cattle.
March ended down 0.425 cent per lb. at 170.700 cents, and April finished at 171.200 cents, 0.600 cent lower.
HOGS UP WITH CASH HOPES
CME hogs closed higher in anticipation of tighter supplies in the coming weeks that could drive up cash prices, traders said.
On Friday morning, USDA reported the average price of hogs in the western Midwest $2.53 per cwt. lower at $89.53, but up 32 cents at $88.20 in the eastern region.
More winter storms next week could crimp supplies, a Midwest hog dealer said. Heavy snow in Iowa and parts of Minnesota on Friday slowed the flow of hogs to packing plants, he said.
USDA data showed packers on Friday processed 377,000 head of hogs, 48,000 fewer than last week and 26,000 less than a year earlier.
The trader said the Porcine Epidemic Diarrhea virus (PEDv) spread may reduce hog numbers sometime in March.
Deferred-hog months marked new highs fueled by persistent speculation that PEDv, which is fatal to baby pigs, will led to fewer hogs through the end of the 2014.
However, some investors believe cash hog prices in the near term might suffer if packer margins slip into the red and wholesale pork demand wanes.
April hogs settled at 99.350 cents per lb.,1.525 cents higher after posting a new contract high of 99.425 cents.
June finished at 108.025 cents, up 0.250 cents.
