By Theopolis Waters
CHICAGO, March 5 (Reuters) – Chicago Mercantile Exchange live cattle futures slumped on profit-taking on Wednesday after Tuesday’s rally to new highs, traders and analysts said.
Some CME live cattle traders liquidated long positions in response to similar moves in the lean hog market. The hog market had set 3-cent limit gains on Tuesday and early Wednesday, and that had stirred live cattle futures buying.
The live cattle selling sparked expectations of no better than steady cash cattle prices for this week, despite rising beef cutout values.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
The afternoon’s wholesale choice beef price, or cutout, rose $2.75 per hundredweight from Monday to $234.51. Select cuts gained $2.19 to $231.93, based on U.S. Department of Agriculture data.
Feedlots in Texas and Kansas priced cash cattle at $154 per cwt., with no response from packers. Last week, cash cattle in Texas and Kansas fetched a record high of $150 per cwt., and Nebraska topped out at a record $152, feedlot sources said.
April live cattle closed 1.950 cents per lb. lower at 143.675 cents, after spiking to a new contract high of 146.825 cents in electronic trading.
June closed at 135.775 cents, down 1.225 cents. It marked a fresh high of 138.050 cents.
Lower CME live cattle dragged feeder cattle futures from contract highs.
March ended 0.675 cents per lb. lower at 172.225 cents, and posted a new contract high of 174.125 cents. April closed down 0.350 cent at 174.000 cents and reached a new high of 175.575 cents.
HOGS END MOSTLY HIGHER
CME hogs finished mostly higher, but down from their initial 3-cent limit spike driven by anticipation of tight supplies as a deadly pig virus spread on U.S. farms, traders said.
The Porcine Epidemic Diarrhea virus (PEDv) is deadly to piglets and is expected to dent hog supplies beginning this spring through the rest of the year.
“Profit-taking came into the market after being grossly overbought because of the flow of new money attracted by the pig virus impact,” a trader said.
Higher cash and pork prices triggered bargain-hunting that landed deferred hog contracts back into positive territory by day’s end, he said.
Wednesday afternoon’s average price of hogs in the closely watched Iowa-Minnesota market was $103.28 per hundredweight, up 24 cents from Tuesday, according to the USDA.
Separate USDA data showed the afternoon’s price of pork at wholesale at $109.05 per cwt., $1.51 higher than on Tuesday.
April closed 0.950 cents per lb. lower at 110.725 cents, after peaking at a high of 114.675 cents.
June finished 2.000 cents higher at 117.750 cents, after posting a fresh contract high of 118.750 cents. July finished at 116.325 cents, 1.925 cents higher and marked a fresh contract high of 117.400 cents.
