CHICAGO, June 7 (Reuters) – Most Chicago Mercantile Exchange live cattle contracts closed moderately lower on Tuesday after traders sold deferred months and bought June as wholesale beef values improved, traders said.
June live cattle closed up 0.450 cent per lb to 121.225 cents. August ended 0.550 cent per lb lower at 116.000 cents, and October finished down 0.500 cent to 115.500 cents.
The prospect of increased cattle supplies in the coming weeks further pressured back months.
“The cattle market seems fixated on larger supplies ahead,” said Brock Associates analyst Doug Houghton.
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He also cited negative technical action on Monday led by deferred months that
retreated after peaking at their highest levels since May 19.
The morning’s choice beef price, or cutout, was at $224.41 per cwt, up 31 cents from Monday. Select cuts jumped $2.29 to $202.37, the U.S. Department of Agriculture said.
Supermarkets bought beef for Father’s Day and Fourth of July holiday advertisements, traders and analysts said.
An uptrend in beef cutout values, and roughly 30,000 fewer cattle for sale than last week, could underpin prices for market-ready, or cash, cattle by Friday.
Cash bids in Texas surfaced at $125 per cwt against $130 to $132 asking prices from sellers there, said feedlot sources.
Last week, cash cattle in the U.S. Plains brought $124 to $132.50.
Investors eyed forecasts for hot weather in parts of the U.S. Plains over the weekend that may slow down cattle weight gains, which could later lend more support to cash and wholesale beef prices.
Lower back-month live cattle futures pressured CME feeder cattle contracts. August closed down 0.075 cent per lb to 145.450 cents.
HOG MARKET CLOSES LOWER
CME lean hogs closed lower on profit-taking following a wholesale pork price drop that might prompt packers to cut cash bids, traders said.
“I think we’ll be led by the product. So depending on what it does, cash will kind of follow,” an Iowa hog dealer said.
Tuesday morning’s wholesale pork price slumped $1.34 per cwt from Monday to $85.47 per cwt, said USDA.
Government data on Tuesday showed the morning average cash hog price in Iowa/Minnesota up a penny from Monday to $76.33, and 13 cents higher to $75.97 in the western Midwest.
Spot June closed down 0.400 cent per lb to 81.850 cents. July ended 0.525 cent lower at 86.275 cents, after earlier posting a new contract high of 87.650 cents.
