By Theopolis Waters
CHICAGO, Aug 11 (Reuters) – Chicago Mercantile Exchange live cattle posted modest losses after an up-and-down day, as investors pocketed profits while waiting for cattle in the cash market to change hands this week, traders said.
Spot August futures closed down 0.075 cent per pound at 150.175 cents, and October 0.150 cent lower at 149.150 cents.
Market participants look for packers to pay roughly the same for cattle as last week given tight supplies and resurgent beef demand as retailers stock up for Labour Day demand.
Falling gasoline prices and the seasonal lull in beef prices could give retailers more confidence about putting more product in their meat cases, traders and analysts said.
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Tuesday morning’s wholesale Choice beef price was up 61 cents per cwt. from Monday to $239.13. Select cuts rose $1.16 to $233.08, the USDA said.
CME feeder cattle garnered support from steady-to-higher cash feeder cattle prices and the steep drop in corn futures.
August finished down 0.175 cent per lb to 214.075 cents, and September up 0.050 cent higher at 210.425 cents.
Lean hogs finished mixed on Tuesday, supported by futures’ discounts to CME’s recent hog index at 78.90 cents, but pressured by weak cash and wholesale pork values, traders said.
The average Tuesday morning price for market-ready, or cash, hogs in Iowa-Minnesota had sagged 24 cents per hundredweight (cwt) from Monday to $74.01, based on U.S. Department of Agriculture data.
The morning’s wholesale pork value, or cutout, was at $87.91 per cwt, a $2.29 drop from Monday with ribs the only item not priced lower, USDA said.
Despite their extremely profitable margins, primarily due to cheaper hogs, packers do not have to compete for animals that are in good supply, a trader said.
Pork processor margins for Tuesday were at a positive $25.75 per head, compared with a positive $23.95 on Monday and a positive $18.45 a week ago, as calculated by HedgersEdge.com.
Plentiful pork has allowed grocers to “cherry pick” when and how much product they need for Labor Day grilling demand, the trader said.
