CHICAGO, March 23 (Reuters) – Chicago Mercantile Exchange live cattle losses lingered into a fifth straight session on Wednesday, led by chart-related selling and anticipation of weaker cash prices by Friday, traders said.
April live cattle ended 0.975 cent per lb lower at 135.450, and June finished 1.050 cents lower at 125.100. Both contracts settled beneath their 40-day moving average of 135.72 and 125.24 cents, respectively.
Packers in Kansas bid $135 per cwt for market-ready, or cash, cattle that sellers priced up to $141, said feedlot sources. Last week, the bulk of cash cattle in the U.S. Plains brought $139.
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“Packers can’t move product, they’re losing their margins and futures have unraveled,” a trader said, citing threats to this week’s cash returns.
Wednesday’s estimated average beef packer margin was a negative $2.20 per head, down from a positive $18.70 on Tuesday and a positive $29.00 a week ago, as calculated by HedgersEdge.com.
The morning’s wholesale choice beef price dropped $1.23 cents per cwt from Tuesday to $226.68. Select cuts rose 42 cents to $218.42, the U.S. Department of Agriculture said.
“Beef got too high too fast,” said AgriVisor Services analyst Dale Durchholz, citing the beef cutout’s surge to two-month highs last week.
CME feeder cattle futures extended its losing streak to five consecutive days following similar moves in the live cattle market.
March feeder cattle, which will expire on Thursday, ended down 0.150 cent per lb to 161.400 cents, and April closed 1.300 cents lower at 155.550 cents.
CME lean hog futures’ premiums to the exchange’s hog index for March 21 at 66.00 cents and uncertainty before Friday’s USDA quarterly hog report deterred buyers, traders said.
Analysts, on average, look for the report to show a margin increase in the U.S. hog herd during the December-through-February quarter versus a year ago.
April closed 0.475 cent per lb lower at 69.675 cents, May ended up 0.025 cent at 78.500 cents and June finished down 0.075 cent at 82.775 cents.
Potential futures buyers were content to watch the day’s quiet trade from the sidelines while waiting for clear fundamental market direction.
The morning wholesale pork price on Wednesday was up 17 cents per cwt from Tuesday to $76.48, according to government data.
Cash hogs in the Midwest on Wednesday morning held steady as packers gauged pre-Easter holiday inventories, said regional hog dealers.
