CHICAGO, April 30 (Reuters) – Aside from the April contract, Chicago Mercantile Exchange live cattle futures slumped Tuesday on late-session fund liquidation, traders and analysts said.
Futures losses mounted as investors took profits on the last trading day of the month.
Live cattle at the CME were poised to finish down less than 1 percent for the month.
Thinly traded spot April, which expired at noon CDT (1700 GMT), closed at 128.400 cents per lb, up 0.700 cent. It drew support from last week’s stronger-than-expected cash cattle prices.
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June futures, the new lead month, and August slipped below their respective 40-day moving averages of 122.16 cents and 123.07 cents, igniting fund selling.
Most-actively traded June ended at 121.900 cents, 0.650 cent lower. August closed down 0.525 cent to 122.550 cents.
Cash-basis cattle bids in Texas surfaced at $127 per cwt against $130 to $131 asking prices there and elsewhere in the U.S. Plains, feedlot sources said. Cash cattle last week moved at $128 to $130.
“We’re going to play this through once April is off the board. June will move higher but that $130 cash level is a hard cap,” said Country Hedging broker Steve Wagner.
Fewer cattle for sale and steadily rising wholesale beef values with grocers gearing up for grilling features could lend cash support.
And cash bids developing so early in the week suggests to feedlot operators that packers are short bought cattle.
The U.S. Department of Agriculture’s Tuesday morning data showed the average wholesale choice beef price at $194.96 per cwt, up 17 cents from Monday; select cuts climbed $1.49 to $187.71.
The weaker live cattle market and technical selling sank CME feeder cattle futures.
Still, CME feeder cattle finished up nearly 3 percent for the month.
May feeder cattle closed at 139.550 cents, down 0.875 cents per lb. And August finished 0.975 cents lower at 148.900 cents.
HOGS REBOUND WITH CASH
A seven-day stretch of higher cash hog prices helped CME lean hog futures shrug off Monday’s modest losses, analysts and traders said.
The average hog price on Tuesday in the most-watched Iowa/Minnesota market was $86.05 per cwt, $2.35 higher than on Monday, USDA said.
CME hogs are poised to settle up around 12 percent for the month. It would be their biggest monthly gain since 15.51 percent for the month of Dec 2010.
CME June hogs settled 0.425 cent higher at 92.575 cents per lb. July hogs closed at 92.900 cents, up 0.400 cent.
“Cash is only as good as grocery story meat demand and packer margins allow it to be,” a trader said.
HedgersEdge.com calculated U.S. pork margins on Tuesday at a positive $4.50 per head versus a positive $7.25 on Monday and a positive $9.30 a week ago.
USDA’s Tuesday afternoon mandatory wholesale pork price, calculated on a plant-delivered basis, was $86.72 per cwt, down $1.51 from Monday.
