CHICAGO, Sept 3 (Reuters) – Chicago Mercantile Exchange live cattle finished moderately higher on Thursday, at first lifted by short-covering and technical buying that later gave way to initial lower cash prices, traders said.
October ended up 0.375 cent per lb at 141.600 cents, and December 0.550 cent higher at 143.875 cents.
Earlier on Thursday, a small number of market-ready, or cash, cattle moved in eastern Nebraska at $142 per cwt, up $1 from Wednesday’s light volume sales, but as much as $5 lower than a week ago in the state, feedlot sources said.
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“Nebraska cattle that sold at $142 may have drawn a lower price because they had gotten heavier than most packers are looking for,” a feedlot manager said.
Still, futures investors expected processors to spend less than last week for supplies as beef demand slows down seasonally and plants prepare to close for the Labor Day holiday.
Cash bids for remaining cattle in Nebraska were at $142 per cwt and $143 to $144 in Kansas and Texas, versus as much as $148 asking prices, feedlot sources said. Last week, cash cattle in the U.S. Plains moved at $144 to $147.
The morning’s wholesale choice beef price dropped 78 cents to $240.19 per cwt from Wednesday. Select cuts fell $1.02 to $228.01, the U.S. Department of Agriculture said.
“I suspect that we’re looking at demand beyond the holiday and we’ve got a lot of pork and chicken around,” said Linn Group analyst John Ginzel.
CME feeder cattle gained for a second straight day, supported by live cattle market buying and lower corn futures, with September feeder cattle closing 1.800 cents per lb higher at 202.550.
SOFT HOG FUTURES SETTLEMENT
Lean hog contracts at the CME ended weak, pressured by recent wholesale pork price slippage and the 11-day slide in cash hog values, traders said.
Spot October closed down 0.325 cent per lb to 69.450 cents, and December 0.650 cent lower at 64.025.
Thursday morning’s wholesale pork price, or cutout, at $85.90 per cwt, dipped 4 cents from Wednesday, mostly led by $6.12 lower rib costs. But $2.52 higher pork belly prices helped minimize the cutout decline, based on USDA data.
USDA reported Thursday morning’s average cash hog price in Iowa/Minnesota had dropped $1.17 per cwt from Wednesday to $70.43.
The industry is in a seasonal hog and pork production expansion phase that has put packers in firm control, said Ginzel.
