CHICAGO, April 18 (Reuters) – Chicago Mercantile Exchange live cattle futures slumped on Thursday, dragged down by profit taking amid uneasiness about prices for cattle left to sell in the cash market, traders and analysts said.
They also cited weak wholesale beef prices as wet cold weather delays spring grilling.
Funds sold after the April and June contracts drifted below their respective 20-day moving averages of 126.60 and 121.79 cents.
Spot April live cattle closed 0.675 cent per lb. lower at 126.200 cents. Most-actively traded June ended at 121.375 cents, down 0.450 cent.
Read Also
U.S. livestock: Cattle futures climb higher to end week
Cattle futures on the Chicago Mercantile Exchange were stronger on Friday, finding some support from fresh details on the U.S. Department of Agriculture’s plans to deal with new world screwworm.
Investors await the U.S. Department of Agriculture’s monthly cattle-on-feed report on Friday.
Analysts expect the data to show the number of cattle in feedlots last month fell from a year ago as high-priced corn reduced demand for younger cattle.
“Futures were lower today because of worries about what kind of cash cattle market we’re going to have,” said KIS Futures vice-president Lane Broadbent.
Futures’ retreat on Thursday curbed initial enthusiasm for higher cash cattle returns. Unprofitable, but improving, beef packer margins and inconsistent wholesale beef demand could also weigh on cash prices.
Earlier this week a small number of cattle in Texas traded at $125 per cwt., down $2 from a week ago, said feedlot sources.   Cash bids for cattle elsewhere in the state and the U.S. Plains stood at $125 against $127 or higher asking prices, they said.
USDA Thursday morning quoted the average wholesale choice beef price, or cutout, at $190.89 per cwt., down 44 cents from Wednesday. Select cuts slipped 11 cents to $184.38.
U.S. beef packer margins on Thursday morning were estimated at a negative $38.00 per head versus a negative $45.35 on Wednesday and a negative $54.70 a week ago, according to HedgersEdge.com.
CME feeder cattle fell on profit taking and the lower live cattle market.
Spot April settled down 2.075 cents per lb. to 134.450 cents. It posted a new contract low of 134.325 cents in after-hours trading.
Most-actively traded May closed at 140.050 cents, 0.850 cent lower.
HOGS UP ON PORK DEMAND
CME hog futures eked out a 2 ½ month high for a second straight session as wholesale pork prices moved upward, analysts and traders said.
“A lot of this is in anticipation of seasonal demand with warmer weather coming in,” said independent livestock futures trader Dan Norcini.
Nearby futures contracts opened above technical resistance levels, attracting more fund buyers and touching off buy stops.
But uncertainly about cash hog prices in the near term restricted CME hog advances. And, traders remained nervous about futures’ premium to the exchange’s hog index, which was at 81.69 cents.
CME June hogs settled up 0.250 cents at 90.600 cents per lb. It finished above where the 20-day and 40-day moving averages converge at 90.41 cents.
July finished at 90.800 cents, 0.200 cent higher after settling above the 40-day moving average support level of 90.65 cents.
Thursday morning’s USDA mandatory wholesale pork price, calculated on a plant-delivered basis, was at $83.98 per cwt., up 37 cents from Wednesday.
