CHICAGO, Aug 8 (Reuters) – Chicago Mercantile Exchange live cattle futures closed lower on Monday, pressured by fund selling and profit-taking after last week’s market rally, traders said.
August live cattle ended 0.750 cent per lb lower at 116.925 cents. October closed 0.875 cent lower at 114.650 cents and below the 100-day moving average of 115.16 cents.
“I don’t see anything about this action today that’s not consistent with a market that’s just seeing itself pull back from a big up. I think we’re going higher,” said West Oak Commodities analyst Tom Tippens.
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Investors expected packers to pay more for supplies than last week as grocers look to satisfy meat demand for the Sept. 5 Labor Day holiday, the last grilling holiday of the summer.
Last week, market-ready, or cash, cattle brought $117 to $120 per cwt, up from $116 to $117 the week before.
The morning’s choice beef price declined 27 cents per cwt from Friday to $198.73. Select cuts jumped $1.25 to $191.45, the U.S. Department of Agriculture said.
Monday is the first notice day for live cattle deliveries against the August contract that will expire on Aug. 31.
Some market participants periodically sold August futures and bought deferred contracts to avoid taking potential delivery of cattle, traders and analysts said.
CME feeder cattle was pressured by profit-taking but supported by steady-to-higher cash feeder cattle prices..
August feeders closed down 0.525 cent per lb to 149.125 cents, September ended unchanged at 147.200 cents and October finished 0.425 cent per lb higher at
144.300 cents.
Speculative buying and buy stops lifted most CME lean hog contracts, traders said.
They said August futures, which will expire on Friday, lagged after investors sold that contract and simultaneously bought deferred months..
August hogs finished down 0.350 cent per lb to 67.100 cents after earlier posting a new contract low of 66.950 cents. October ended 0.550 cent per lb higher at 58.850 cents and December up 0.650 cent to 54.725.
Lower-trending cash prices made some market bulls nervous about buying the October contract despite its sizable discount to CME’s hog index for August 4 at 70.48 cents.
“There are a ton of hogs around right now and it’s hard to say how much of that is already baked into the market. So I’m waiting to see what happens after August goes off the board on Friday,” a trader said.
