Chicago | Reuters — Chicago Mercantile Exchange live cattle ended mixed on Tuesday with nearby contracts supported by their discounts to recent cash prices, while back months sagged on forecasts for increased supplies ahead, traders said.
February closed 0.65 cent per pound higher at 159.1 cents, and April up 0.125 cent, to 153.775 cents (all figures US$). June ended down 0.15 cent, to 145.925 cents, and August 0.675 cent lower at 144.1 cents.
Last week, market-ready (cash) cattle in the U.S. Plains sold at $160-$162.50 per hundredweight (cwt).
Investors bought nearby months, and simultaneously sold deferred contracts, in the belief that packers will spend at least steady money for cash cattle this week.
Typically, wintry weather and cold temperatures in February tighten cattle supplies, making them less available to processors.
The cash market held up well despite poor packer margins, slack beef demand and West Coast port issues, said KIS Futures vice-president Lane Broadbent.
Tuesday morning’s choice wholesale beef price dipped three cents/cwt from Monday, to $238.45. Select cuts rose $1.02, to $233.32, the U.S. Department of Agriculture said.
The day’s beef packer margins were a negative $79.45 per head, compared with a negative $76.25 on Monday and a negative $65.75 per head a week ago, according to Colorado-based analytics firm HedgersEdge.com.
CME feeder cattle dropped on profit-taking, back-month live cattle selling and additional feeder cattle supplies in the coming months.
March closed 1.6 cents/lb. lower at 202.025 cents, and April down 1.55 cents at 201.725 cents.
Mixed hogs settlement
CME lean hogs’ February contract, which will expire on Feb. 13, gained due to its discount to the exchange’s hog index for Feb. 6 at 66.65 cents.
Struggling cash and wholesale pork prices pressured April futures that will become the new lead month after February expires.
February closed up 0.25 cent/lb., to 61.525 cents, and April down 0.175 cent, to 66.575 cents.
The morning’s average cash hog price in Iowa/Southern Minnesota fell $1.30/cwt from Monday, to $59.29, USDA said.
Separate government data showed the morning’s wholesale pork price at $71.71/cwt, $1.99 lower than on Monday.
Packers are snug on inventory for the rest of the week, while trying to clear a backlog of pork, partly caused by the slowdown of U.S. exports on the West Coast, a trader said.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.Tagged cattle futures, CME, hog futures