By Theopolis Waters
CHICAGO, March 9 (Reuters) – Chicago Mercantile Exchange live cattle ended lower on Monday, pressured by profit-taking and funds that sold or “rolled” April contracts and simultaneously bought deferred months, traders said.
Funds involved in CME’s livestock markets that follow the Standard & Poor’s Goldman Sachs Commodity Index (S&P GSCI) shifted their April positions in a process known as the S&P GSCI roll.
Monday was the second of five days for the S&P GSCI roll procedure.
Investors await this week’s market-ready, or cash, cattle prices after short-bought packers last week spent more for supplies.
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Traders are eyeing tepid beef sales versus cheaper pork, and with East Coast residents digging out from recent snow storms that hurt consumption.
Monday morning’s choice wholesale beef price fell 70 cents per cwt from Friday to $247.78. Select cuts rose 99 cents to $245.38, the U.S. Department of Agriculture said.
April closed 0.650 cents per pound lower at 154.000 cents, and June down 0.950 cent at 146.150 cents.
CME feeder cattle contracts dipped on profit-taking, firm corn prices and live cattle market weakness.
March closed down 0.025 cent per lb at 209.700 cents, while April ended 0.175 cent lower at 208.400 cents.
HOG FUTURES SAG
CME lean hogs eased on softer cash hog prices and deferred-month futures’ premiums to the exchange’s hog index for March 5 at 67.92 cents, traders said.
April closed down 0.050 cent per lb at 66.075 cents, and June was 0.675 cent lower at 76.575 cents.
USDA data showed the average cash hog price in Iowa/Minnesota on Monday morning fell $1.62 per cwt from Friday to $62.10.
Sufficient supplies and lackluster domestic and export pork sales, pegged to the dollar’s surge to an 11-1/2 year high and buildup of pork on West Coast docks, were bearish futures factors.
Still, speculative buyers are betting that warmer weather and less-costly pork will soon reignite meat demand in time for spring grilling.
“Pork is so cheap that at some point, whether its China or whomever, is going to come in and clean up some of that cheap product,” said Kip Crook, president of KPC Trading, Inc.
