CHICAGO, May 24 (Reuters) – Chicago Mercantile Exchange live cattle futures slumped for a second straight session on Tuesday, pressured by follow-through selling and potentially softer cash prices later this week, traders said.
June live cattle closed down 0.150 cent per lb at 118.000 cents, and August ended 1.275 cents lower at 113.175 cents.
Futures will trade their normal 3.000-cent daily price limit on Wednesday after failing to settle down the expanded 4.500-cent limit on Tuesday.
“Product isn’t doing well, futures are down again and plants are closed on Memorial Day. It doesn’t look good for the cattle guys,” a trader said.
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Last week, packers in the U.S. Plains paid $130 to $132 per cwt for market-ready, or cash, cattle.
The choice beef price, or cutout, to $224.11 per cwt on Tuesday morning, down 21 cents from Monday. Select cuts rose $1.68 to $208.83, according to U.S. Department of Agriculture data.
With almost 23,000 more cattle for sale this week after packers bought fewer of them last week, cash prices could be further pressured.
Spot June future’s discount to last week’s cash prices stirred bull spreading, which consisted of traders buying the spot month and simultaneously selling deferred contracts.
More live cattle futures losses and lower cash feeder cattle prices of as much as $10 per cwt weighed on CME feeder cattle for a second day in a row.
May ended down 1.000 cent per lb to 146.000 cents. Most-active August closed 1.325 cents lower at 142.100.
Futures on Wednesday will return to the regular 4.500-cent limit from a 6.750-cent expanded limit.
FIRM HOG MARKET CLOSE
Short-covering and bull spreading lifted CME lean hog futures, traders said. Spot-June closed 0.600 cent per lb higher at 79.675 cents, and July ended up 0.075 cent to 79.375 cents.
Hog contracts made headway despite weak cash and wholesale pork prices due to packers and grocers curbing buying as the three-day Memorial Day holiday weekend approaches, traders said.
Tuesday morning’s wholesale pork price was down $1.14 to $83.01 per cwt from Monday, according to USDA data.
Separate government data on Tuesday morning showed the average cash hog price in the western Midwest was down 89 cents per cwt to $75.80 from Monday in light volume.
“Some farmers are not bringing in hogs so they can catch up on planting, and others are moving them before the holiday. So we’re playing it by ear cash-wise,” an Ohio hog dealer said.
(Editing by Paul Simao)
