By Theopolis Waters
CHICAGO, Sept 9 (Reuters) – Chicago Mercantile Exchange live cattle closed lower on Wednesday, after profit-taking and cash price uncertainty turned back initial advances, traders said.
Spot-October closed 0.500 cent per lb lower at 142.975 cents, and December dropped 0.700 cent to 145.075.
Packers have not bid for market-ready, or cash, cattle priced at $146 per hundredweight (cwt) in Texas and Kansas, feedlot sources said. Last week, cash cattle in the U.S. Plains moved at $142 to $143.50.
Firm beef cutout values, impressive packer margins and processors buying for the first full slaughter week after Labour Day supported cash prices, traders said.
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But packers prefer to control spending for cattle that have grown heavier as producers hold them back while negotiating for better prices.
“People who have gotten used to getting $150 to $160 cattle can’t stand it when prices are closer to $130,” a Midwest feedlot manager said.
The longer sellers hold cattle, the more some packers penalize them for heavier animals, he said.
Wednesday morning’s wholesale Choice beef price was up 33 cents to $239.49 per cwt from Tuesday. Select cuts rose 71 cents to $229.36, the U.S. Department of Agriculture said.
Wall Street’s slide from session highs discouraged would-be CME live cattle futures buyers.
Funds trading CME’s livestock markets shifted October long positions into deferred months in a procedure known as the “roll” by followers of the Standard & Poor’s Goldman Sachs Commodity Index.
Wednesday was the second of five days for the roll process.
Profit-taking and live cattle futures losses pressured CME feeder cattle. September closed 0.475 cent lower at 203.825.
OCT HOGS UP, OTHERS DOWN
CME October lean hogs were supported by higher wholesale pork prices as supermarkets restocked meat cases after Labor Day while buying for National Pork Month in October, traders said.
Anticipation of increased hog supplies beginning in a few weeks dragged on remaining futures contracts, they said.
Spot October closed up 0.150 cent per lb at 68.925 cents, December slipped 0.050 cent to 63.550 and February ended 0.100 cent lower at 68.100 cents.
Wednesday morning’s wholesale pork price at $87.01 per cwt was $1.15 higher than on Tuesday, with hams posting the biggest cost increase, based on USDA data.
The morning’s average cash hog price in Iowa/Minnesota was up 5 cents per cwt from Tuesday at $67.68, but down four cents in the western Midwest at $67.49, USDA said.
