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LIVESTOCK-CME live cattle braces for possible weak cash prices
February 13, 2017 / 9:19 PM / 9 months ago

LIVESTOCK-CME live cattle braces for possible weak cash prices

    * Feeder cattle closes lower
    * Mostly lower hog contracts

    By Theopolis Waters
    CHICAGO, Feb 13 (Reuters) - Chicago Mercantile Exchange live
cattle futures sagged on Monday in advance of potentially lower
cash prices this week as packers attempt to recover lost
profits, said traders.
    February live cattle         closed down 0.475 cent per
pound at 115.925 cents, and April         was 0.625 cent lower
at 112.525 cents.
    Monday's average beef packer margins were at a negative
$81.80 per head, down from negative $75.10 on Friday and a
negative $59.75 a week ago, as calculated by HedgersEdge.com.
    Last week, slaughter-ready, or cash, cattle in the U.S.
Plains brought $119 to $120.50, steady to $1.50 higher than in
the previous week.
    Investors await Wednesday's Fed Cattle Exchange sale of
about 4,800 animals that last week, on average, brought $117.50.
 
    Some processors have already scaled back production to rein
in cash spending, said analysts and traders.
    Reduced slaughter rates typically help improve packer
margins and stimulate beef buying interest from grocers to avoid
possible inventory shortages of meat.
    The morning's choice wholesale beef price was up 51 cents
per cwt to $188.14 from Friday. Select cuts climbed $1.39 to
$187.04, the U.S. Department of Agriculture said.
    Fund selling and slumping live cattle futures weighed on 
CME feeder cattle contracts.
    March feeders         closed down 0.250 cent per pound to
121.825 cents.
   
    MOSTLY LOWER HOG FUTURES
    CME February lean hogs, which will expire on Thursday,
tracked the exchange's hog index for Feb. 9 at 73.51 cents, said
traders.
    They said other trading months were pressured from
profit-taking, technical selling and softer cash hog prices.
    February hogs         ended up 0.200 cent per pound to
74.750 cents. Most actively-traded April         closed 1.375
cents lower at 69.700 cents, and May         down 0.450 cent to
74.950 cents.
    Monday morning's cash hog price in Iowa/Minnesota averaged
$71.54 per cwt in light volume, 64 cents lower than on Friday,
the USDA said.
    "It sounds to me like most packer inventories are full. But
I also heard some of them could still squeeze in a few pigs to
round out the edges," a Midwest hog merchant said.
    Pork cutout values rose on Monday, mainly because of the
rebound in pork belly prices that some believe might trend lower
as more supplies come online in the months ahead.
    U.S. government data on Monday morning showed the average
wholesale pork price up 58 cents per cwt to $85.67 from Friday,
following $4.60 higher pork bellies.

 (Reporting by Theopolis Waters; Editing by Chris Reese)
  

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