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U.S. livestock: CME live cattle rise with cash bids

USDA cattle, storage reports due out Friday

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed higher on Thursday, supported by short-covering after packers hiked bids for unsold market-ready (cash) cattle, traders said.

Spot-August futures closed 1.225 cents/lb. higher at 146.475 cents, and October 1.175 cents higher at 146.325 cents (all figures US$).

Processors in Kansas and Texas on Thursday morning raised cash bids to $148/cwt, up from $146 on Wednesday, versus $153 asking prices, feedlot sources said.

Late on Wednesday, more cattle sold at $149 following light sales of $145 earlier in the day. Overall, cash prices in the U.S. Plains last week fetched mostly $148 to $150.

Some processors need cattle after not buying enough last week, while others cut slaughters to conserve their profitable margins, traders and analyst said.

“You’d think that with the possibility of $148 to $149 cash, futures would be a lot higher,” said Vetterkind Cattle Brokerage president Troy Vetterkind.

But, he said, beef demand faces challenges from cheaper pork and chicken along with global economic issues that could hurt exports.

Thursday morning’s wholesale choice beef price climbed 87 cents/cwt from Wednesday, to $247.65. Select cuts slipped 53 cents, to $235.91, the U.S. Department of Agriculture said.

Futures’ advances stalled ahead of the government’s monthly Cattle-On-Feed report on Friday at 2 p.m. CT.

USDA will simultaneously issue its monthly cold storage data, which will include July beef and pork inventories.

A few analysts, on average, estimated last month’s cold storage total beef stocks at 464.5 million lbs., and pork stocks at 613.4 million lbs.

CME feeder cattle were pressured by firm corn futures and this week’s lower cash feeder cattle prices. August ended 0.6 cent/lb. lower at 213.2 cents.

Hog futures slump on fundamentals

Lower cash and wholesale pork prices dropped CME lean hogs, traders said.

The spot-October contract closed down 1.25 cents/lb., to 64.75 cents, and December 0.975 cent lower at 61.3.

The government reported the morning’s Iowa/Minnesota average cash hog price at $75.33/cwt, $1.09 lower than on Wednesday.

Thursday morning’s wholesale pork price, at $87.11/cwt, had fallen $1.16 from Wednesday, with all cuts lower except pork bellies, which were $4.42 higher, USDA said.

Some packers cut cash bids after buying all they need for this week, and supermarkets may be booking less pork as the Labour Day holiday approaches, a trader said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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