By Theopolis Waters
CHICAGO, Dec 3 (Reuters) – Chicago Mercantile Exchange live cattle futures sagged on Wednesday in anticipation of weaker prices for slaughter-ready or cash cattle, traders said.
Futures’ losses, sunken margins and packers struggling to sell significant amounts of beef to retailers are bearish cash price indicators.
Additionally, cash prices tend to slump seasonally in late November, but snap back around mid-December, traders and analysts said.
Packers tabled cash bids of $166 per hundredweight (cwt) in Kansas and Nebraska with no response from sellers, feedlot sources said. Last week, slaughter cattle in the U.S. Plains moved at mostly $172 to $173.
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Wednesday morning’s Choice wholesale beef price gained 86 cents per cwt from Tuesday to $257.22. Select slipped 20 cents to $243.46, the U.S. Department of Agriculture said.
Beef packer margins for Wednesday were a negative $120.70 per head, compared with a negative $104.50 on Tuesday and a negative $100 a week earlier, according to Colorado-based analytics firm Hedgersedge.com.
December and February selling mounted after they fell below their respective 40-day moving averages of 167.68 cents and 168.07 cents.
CME livestock investors cited the stronger dollar that could make U.S. goods less attractive to foreign buyers.
Bargain hunting and short-covering later lifted CME live cattle from session lows.
December closed 1.775 cents per pound lower at 166.850 cents, and February down 1.925 cents to 167.125 cents.
Technical selling and live cattle futures’ losses dropped CME feeder cattle.
January ended 0.725 cent per lb. lower at 234.825 cents, and March slid 1.575 cents to 231.900 cents.
HOGS FINISH LOWER
CME lean hogs tracked lower cash hogs and wholesale pork prices, traders said.
USDA showed Wednesday morning’s average cash hog price in Iowa/Minnesota down $1.64 per cwt. to $84.94.
Separate government data quoted the morning’s wholesale pork price down 76 cents per cwt. from Tuesday to $91.40.
Packers cut cash hog bids to conserve their thinner margins, a trader said.
Heavyweight hogs may increase the amount of pork available to grocers who have now turned their attention to promoting beef after the Thanksgiving holiday, he said.
Investors sold long December positions as the contract prepares to expire on Dec. 12.
Expectations for a seasonal cash hog price bounce might attract speculative buyers on Thursday, traders and analysts said.
December closed 1.450 cents per lb. lower at 88.450 cents, and February down 2.125 cents to 86.875 cents.
