By Theopolis Waters
CHICAGO, Feb 17 (Reuters) – Chicago Mercantile Exchange live cattle futures finished sharply lower on Tuesday on profit-taking following Friday’s rally, traders said.
February closed 1.400 cents per pound lower at 158.600 cents, and April down 2.500 cents at 150.725 cents.
West Coast port slowdowns and disappointing volume of cattle sold last week, albeit at higher prices, contributed to futures’ losses, said Allendale Inc. chief strategist Rich Nelson.
Last week, market-ready or cash cattle in the U.S. Plains sold at $162 to $163.50 per hundredweight (cwt), compared with $160 to $162.50 the prior week, feedlot sources said.
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Extremely poor margins limited how many cattle packers bought last week, resulting in more livestock for sale this week, traders and analysts said.
Processors and grocers spent more for supplies as cattle numbers tighten seasonally, they said.
Tuesday morning’s choice wholesale beef price jumped $2 to $240.22 per cwt. from Monday. Select cuts rose $1.01 cents to $234.05, the U.S. Department of Agriculture said.
The day’s beef packer margins were a negative $108.70 per head, compared with a negative $95.10 on Monday and a negative $79.45 per head a week ago, according to Hedgersedge.com.
Fund selling surfaced after April and June drifted below the 20-day moving average of 150.92 cents and 143.94 cents, respectively.
Chart-related selling, profit-taking and live cattle futures’ retreat pulled down CME feeder cattle contracts.
March closed 2.400 cents per lb. lower at 201.450 cents, and April fell 2.525 cents to 200.725 cents.
HOGS MOVE LOWER
CME lean hogs settled lower, pressured by weaker cash and wholesale pork prices, traders said.
April closed 2.025 cents per lb. lower at 64.000 cents per lb, May dropped 1.975 cents to 74.150 cents and June ended 1.750 cents lower at 78.375 cents.
Tuesday morning’s average cash hog price in Iowa/Minnesota had shed $1.28 per cwt from Monday to $55.27, the USDA said.
Slick roads and brutal cold in the Midwest have delayed delivery of hogs to packers who have sufficient inventories for this week’s production, a trader said.
Packers on Tuesday processed 405,000 hogs, 30,000 fewer than last week, based on USDA data.
West Coast gridlock backed up pork shipments, causing that product to compete directly with meat for domestic use, the trader said.
May and June slipped beneath their respective 10-day moving average of 75.76 cents and 79.48 cents, which triggered fund liquidation and sell stops.
