By Theopolis Waters
CHICAGO, July 24 (Reuters) – Chicago Mercantile Exchange live cattle futures closed weak on Wednesday after a choppy session as steady cash cattle prices trumped an uptick in wholesale beef values, traders and analysts said.
“Cash at $119 per hundredweight was steady with last week, but disappointing considering some people thought it would be higher,” a trader said.
Still, investors contend cash sales on Wednesday, rather than on Friday, is a sign packers need supplies and could raise bids for remaining cattle.
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Cash bids for unsold cattle in the U.S. Plains were at $119 per cwt. against asking prices of $121 and higher, feedlot sources said.
Wednesday’s firm choice and select wholesale beef prices provided short-lived support for futures.
The U.S. Department of Agriculture on Wednesday afternoon reported the wholesale price of choice beef at $186.89 per cwt., which was up 55 cents from Tuesday. Select cuts rose 72 cents to $182.22 cents.
Wholesale prices may have come down enough to attract retail buyers, traders said.
August live cattle finished at 121.575 cents, or down 0.325 cent per pound and October closed at 125.675 cents, or down 0.225 cent.
CME feeder cattle cattle settled lower for the first time in five sessions as the weaker live cattle market weighed.
August closed at 153.025 cents, or 0.575 cent per lb. lower and September at 156.375 cents, down 0.250 cent.
MOST HOGS FIRM ON SPREADS
Spread traders sold CME August futures and bought deferred contracts after wholesale pork prices turned lower, said traders and analysts.
The government’s Wednesday afternoon mandatory wholesale pork price report or cutout, calculated on a plant-delivered basis, was at $98.31 per cwt. The price slid $1.34 after rallying $2.73 on Tuesday.
“The cutout dropped with pork cuts down across all categories. Oppressive heat last week dampened grilling, hitting ribs the hardest,” a trader said.
October futures were at a discount to the August contract and CME’s hog index at 100.64 cents, which encouraged buyers.
Traders bought December futures in anticipation of the Porcine Epidemic Diarrhea Virus (PEDV), which is fatal to young pigs, reducing hog supplies later this year.
August hogs closed at 98.925 cents per lb., or down 0.250 cent. October closed at 86.625 cents up 0.300 cent and December 0.475 cent higher at 83.450 cents.
