By Theopolis Waters
CHICAGO, Sept 12 (Reuters) – Chicago Mercantile Exchange live cattle futures posted losses for a second straight day on Friday, weighed down by lower prices for slaughter-ready or cash cattle and beef at wholesale, traders said.
Futures finished off session lows helped by their discounts to this week’s cash cattle returns and sentiment that the recent market selloff was overdone, they said.
October live cattle ended at 156.275 cents per pound, 1.100 cents lower, and December down 0.450 cent to 159.250.
Cash cattle in Kansas sold at $161 to $162 per hundredweight (cwt), $1 to $2 lower than last week, feedlots sources said. They reported cash trades of $161 in Texas, down $2 from a week ago.
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Investors await the sale of cattle in Nebraska where bids stood at $158 per cwt against $164 asking prices, a feedlot source said.
Friday morning’s choice wholesale beef price sagged $1.01 per cwt. from Thursday to $250.53. Select fell 82 cents to $235.53, the U.S. Department of Agriculture said.
Packers balked at spending more for cattle after their margins turned red. And, beef demand typically wanes after Labour Day as preparing meals indoors gradually replaces backyard barbecues.
Funds trading in CME’s live cattle and hog markets shifted October long positions further back in a procedure known as the ‘roll’ by followers of the Standard & Poor’s Goldman Sachs Commodity Index.
CME feeder cattle drew support from buy stops and soft corn prices.
September closed 1.425 cents per lb. higher at 229.475 cents, and October was up 0.325 cent to 225.925 cents.
HOG FUTURES FINISH LOWER
CME live hogs lost ground following mixed, rather than higher, cash prices and weak wholesale pork values, traders and analysts said.
October closed 0.675 cent per lb. lower at 105.700 cents, and December at 96.300 cents, 0.900 cent lower.
The morning’s average hog price in Iowa/Minnesota was up 54 cents per cwt from Thursday to $103.29, but down 24 cents in the eastern Midwest at $96.38, USDA said.
Separate government data showed the morning’s wholesale pork price fell 98 cents per cwt from Thursday to $106.55.
Some packers hiked hog bids to round out this week’s production and carry supplies into early next week, a trader said. Processors who are snug on inventories turned their attention to trying to shore up their margins, he said.
Meanwhile, processors may have discounted the price of some pork cuts to attract business for National Pork Month in October and winter holiday ham interest.
On Monday, investors will monitor cash prices to see if they have put in a near-term top, or resume their recent uptrend based on tight supplies.
