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U.S. livestock: CME live cattle close lower, hogs higher

(Regis Lefebure photo courtesy ARS/USDA)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures lost ground again on Tuesday, pressured by more long liquidation following the morning’s wholesale beef price setback, said traders.

April live cattle closed 1.15 cents/lb. lower at 127.325 cents, and June ended down 0.6 cent/lb. at 118.575 cents (all figures US$).

On Wednesday, live cattle contracts will return to their normal three cents/lb. daily price limit after failing to settle at a newly expanded 4.5-cent limit on Tuesday.

The morning’s wholesale choice beef price was at $223.55/cwt, $1.33 lower than on Monday. Select cuts also dropped $1.33, to $214.65, the U.S. Department of Agriculture said.

“There is a lot of protein out there that is going to make it a little more challenging for beef demand moving forward. But we continue to hear there is a lot of grilling feature activity coming online in the coming months,” said David Maloni, chief commodity strategist with the American Restaurant Association Inc.

Slumping futures prices, a potential slowdown in wholesale beef demand and almost 5,000 more cattle for sale than last week may weigh on cash prices later this week, said analysts and traders.

Last week, packers paid $133-$136/cwt for market-ready, or cash, cattle.

Weaker live cattle futures and sharply lower cash feeder cattle prices pressured CME feeder cattle contracts. April closed down 0.4 cent/lb. at 150.175 cents. An expanded limit of 6.75 cents will return to 4.5 cents on Wednesday.

Higher hog market settlement

Steady to firm cash prices and higher wholesale pork values pushed up CME lean hogs, traders said.

Fund buying developed after May and June surpassed their respective 20-day and 100-day moving averages of 76.14 and 78.91 cents.

Thinly traded May ended 1.35 cents/lb. higher at 76.2 cents. Most-active June finished up 1.1 cents at 78.925.

Cash hogs in the Midwest on Tuesday morning sold steady to $1/cwt higher, supported by profitable packer margins and increased pork demand, said regional hog dealers.

Tuesday morning’s wholesale pork price, or cutout, was 57 cents/cwt higher than on Monday at $80.74, USDA said.

Seasonal pork cutout price gains may be tempered as production trends above year ago levels in the coming weeks based on recent USDA data, said Maloni.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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