By Theopolis Waters
CHICAGO, Aug 27 (Reuters) – Chicago Mercantile Exchange feeder cattle futures on Tuesday rebounded from Monday’s losses, supported by sentiment that lower corn prices would ease input costs for feed lot operators, analysts and traders said.
Chicago Board of Trade corn retreated on profit-taking following Monday’s spike, driven by hot, dry weather in the Plains that could hurt yields.
Spot August feeder cattle tracked CME’s feeder cattle index which was at 154.93 cents. The contract will expire on Aug. 29.
Spot August feeder closed at 154.725 cents, up 0.325 cent per lb. Most-actively traded September closed 1.150 cents higher at 155.275 cents.
Read Also
Canadian Financial Close: Loonie drops, new record for TSX
Glacier FarmMedia | MarketsFarm – The Canadian dollar tumbled on Friday but still ended the week slightly higher than the last….
LIVE CATTLE DOWN WITH CASH IDEAS
Live cattle futures at the CME slid in anticipation of lower cash prices, analysts and traders said.
There were no cash bids or asking prices reported by feed lot sources. Last Friday, cash cattle moved at mostly $123 per hundredweight in Texas and Kansas, and $125 in Nebraska.
Ample cattle available for sale is expected to pressure cash cattle prices.
And packing plants will be closed on Monday for the Labour Day holiday, further reducing their need for supplies.
Investors are monitoring sultry weather in the western Midwest that may slow animal weight gains and curtail the movement of livestock to market.
“Transporting cattle around in these kinds of temperatures is not very smart because of the risk of animal losses,” K&S Financials analyst Jack Salzsieder said.
High-heat and humidity could also curb meat demand for grilling over the three-day holiday weekend.
USDA Tuesday morning reported the wholesale choice beef price, or cutout, at $196.23 per cwt., up 43 cents from Monday. Select cuts rose $1.00 to $185.14.
Spot August live cattle ended down 0.450 cent to 122.950 cents per pound. Most-actively traded October closed 0.425 cent lower at 126.725 cents.
HOGS GAIN ON PORK PRICE
CME hogs gained for a third straight session led by sharply higher wholesale pork prices, traders and analysts said.
Tuesday morning’s government data showed the wholesale pork price, or cutout, at $101.80 per cwt. The cutout jumped $4.01 from Monday largely because of the $18.16 surge in prices for pork bellies, which are processed into bacon.
“We may have seen last gasp pork buying by grocers and restaurants prior to the holiday,” a trader said.
He said pork belly prices may have declined enough to attract bacon processors and slicers for product use after the Labour Day holiday.
Investors bought futures despite lower cash hog prices as hog supplies increase seasonally. And, packing plants are scheduled to be dark for the holiday on Monday.
Packers are believed to have all the hogs they need for the rest of this week’s production, but may raise cash bids after Labour Day to accommodate an expected big Saturday slaughter.
The government on Tuesday morning quoted the average hog price in the most-watched Iowa-Minnesota market $1.90 cents per cwt. lower from Monday at $88.10.
October futures are at a discount to CME’s hog index at 96.98 cents which encouraged buyers.
October hogs finished 0.550 cent higher at 86.575 cents per lb. while December ended up 0.475 cent at 83.550 cents.
