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U.S. livestock: CME live cattle closed mixed

Nearbys down on weak cash

cme october live cattle
CME October 2019 live cattle, with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed mixed on Tuesday, with expectations for a weak cash trade pressuring the benchmark August contract while back months ended firm, traders said.

Packers were not bidding aggressively for cattle, a factor that some traders took as a bearish signal.

“The bids that were out there were lowball. If (packers) were short-bought, it’s not showing,” said Doug Houghton, an analyst with Brock Associates Inc.

Cash beef values were soft. The U.S. Department of Agriculture (USDA) quoted choice boxed beef cutout on Tuesday at $220.53/cwt, down $1.29 from Monday, while select cutout fell 71 cents, to $201.80 (all figures US$).

CME most-active August live cattle settled down 0.075 cent at 105.55 cents/lb.

However, October live cattle rose 0.35 cent to close at 107.05 cents, and CME August feeder cattle ended up 0.325 cent at 137.25 cents/lb.

Feeder cattle and deferred live cattle futures drew support from a setback in corn prices. Chicago Board of Trade corn futures have surged in recent weeks, hitting a five-year high on Monday that signaled higher feed costs for cattle producers.

But the yellow grain’s rally finally paused on Tuesday as planting wound down and traders booked profits.

Cattle futures also found strength from expectations that the monthly Cattle on Feed report due Friday from the U.S. Department of Agriculture will show a year-on-year reduction in the number of U.S. cattle placed on feed in May.

Lean hog futures closed mostly lower with July down 1.575 cents at 81.475 cents/lb. and August down 0.55 cent at 81.7 cents/lb.

But deferred hog contracts appeared to draw support from renewed hopes for U.S.-China trade talks after U.S. President Donald Trump said he would meet with Chinese President Xi Jinping at the G20 summit later this month.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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