By Theopolis Waters
CHICAGO, July 22 (Reuters) – Chicago Mercantile Exchange live cattle on Monday sagged with lower wholesale beef prices, said analysts and traders.
The U.S. Department of Agriculture on Monday afternoon quoted the wholesale price of choice beef at $188.98 per hundredweight, which was down 24 cents from Friday. The Select cutout fell 97 cents to $183.20.
Recent hot weather limited grilling in parts of the country, but cooler temperatures ahead could soon restore meat demand, a trader said.
Futures selling erased early-session gains driven by Friday’s neutral to mildly supportive USDA monthly cattle-on-feed report.
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The report’s inventory and placements outcomes nearly matched trade expectations while marketings were better than expected.
Friday’s steady cash cattle prices fell short of bullish traders’ expectations for higher returns. They said packers would need cattle after buying fewer of them in recent weeks.
Processors saw no need to aggressively buy supplies given slack beef demand.
The USDA’s monthly cold storage report had a negligible effect on CME live cattle futures in after-hours trading.
The government report showed June beef stocks totaled 480.6 million pounds, the highest on record for June.
“This was not surprising after U.S. beef exports to Russia dried up after they banned U.S. beef because of the feed additive ractopamine,” a trader said.
At 1542 CDT August live cattle traded at 121.850 cents, or down 0.125 cent per lb, and October at 125.650 cents, or 0.575 cent lower.
Weaker corn prices, which could increase feedlot demand for young cattle, lifted CME feeder cattle.
August CME feeder cattle were at 152.875 cents, up 0.625 cent per lb., and September at 155.950 cents, or 0.700 cent higher.
HOGS GAIN WITH CASH
CME hogs rose with the cash market and wholesale pork prices turned higher late on Monday after dropping earlier in the session, said traders and analysts.
They said packers increased cash hog bids despite thin margins and inconsistent wholesale pork demand.
Government data showed the average hog price on Monday afternoon in the most-watched Iowa/Minnesota market at $99.84 per cwt., $4.12 higher than on Friday.
Monday afternoon’s USDA mandatory wholesale pork price report, or cutout, calculated on a plant-delivered basis, was at $99.67 per cwt, up 73 cents from Friday.
The USDA reported total pork inventory last month at 564.9 million lb., versus 658.9 million in May and 592.9 million last year.
The storage result contributed to hog futures’ advances.
“I’m pleasantly surprised by the drawdown in overall pork stocks for June,” said independent livestock futures trader Dan Norcini.
“Many of the cuts were making all-time highs (and that) encouraged end users to go for the frozen/chilled product as it was no doubt cheaper,” he said.
CME hog index at 101.31 cents furthered August futures’ buying.
In after-hours trading, CME August hogs rose 1.100 cents to 97.575 cents per lb. October gained 0.550 to 85.525 cents.
