CHICAGO, Jan 29 (Reuters) – Chicago Mercantile Exchange live cattle futures lost ground on Friday, pressured by sell stops and fund liquidation before giving way to cash price optimism that lifted contracts from session lows, traders said.
The U.S. Department of Agriculture will issue the twice-annual cattle inventory report on Friday at 2 p.m. CST (2000 GMT).
February live cattle closed down 0.125 cent per lb to 135.300 cents, and April ended 0.525 cent lower at 134.000.
Packers in Texas raised bids for market-ready, or cash, cattle to $134 to $135 per cwt from $130 to $132 earlier this week, feedlots sources said. Sellers there and elsewhere in the U.S. Plains priced cattle at $136 to $138 per cwt.
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Last week, cash cattle moved at $130 to $134 per cwt.
Some processors short on supplies, and potential livestock delivery delays following wintry weather in the U.S. Plains next week, are supportive cash price influences, said traders and analysts.
They added that a few processors may rein cash spending by cutting kills to focus on recovering lost profits and driving up wholesale beef values.
Friday’s average beef packer margin was a negative $15.40 per head, down from a negative $4.05 for Thursday and a positive $70.75 a week ago, as calculated by HedgersEdge.com.
The morning’s wholesale choice beef price dropped $1.27 per cwt from Thursday to $218.85. Select cuts climbed $1.90 to $217.33, based USDA data.
Higher corn prices and lower CME live cattle futures sank the exchange’s feeder cattle contracts. March feeders closed 2.175 cents per lb lower at 157.250.
HIGHER HOG FUTURES CLOSE
CME lean hogs drew support from generally firm cash and wholesale pork prices, traders said.
Spot February finished up 0.500 cent per lb to 65.800 cents, and April ended 1.000 cent higher at 70.700.
Cash hogs in the Midwest Friday morning sold steady to $1 per cwt higher after packers shored up inventories through early next week, according to regional hog dealers.
The morning wholesale pork price on Friday was up 46 cents per cwt from Thursday to $77.39, the USDA said.
A few supermarkets purchased pork in case next week’s storm slows the flow of product to buyers, a trader said.
