U.S. livestock: Live cattle fall as cash cattle, beef prices sag

Weak cash, pork values also pressure hogs

cme october live cattle
CME October 2019 live cattle with Bollinger (20,2) bands, a gauge of market volatility. (Barchart)

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures fell to contract lows on Thursday as cash cattle prices declined from last week and wholesale beef prices extended their slide, traders said.

Cash cattle traded at $100/cwt in Texas and Kansas, traders said, down from $103 last week (all figures US$).

“Boxed beef is down, steer weights are up and cash trade is $3 lower in the south, at $100. So all that is negative,” said Brian Hoops, president of broker Midwest Market Solutions.

Wholesale beef prices continued to retreat in the wake of the Labour Day holiday, the last major grilling holiday of the summer. The U.S. Department of Agriculture late Thursday quoted choice boxed beef cutout at $229.42/cwt, down $1.23 from Wednesday, and select cutout tumbled $4.48, to $204.47.

CME October live cattle futures settled down 1.15 cents at 97.875 cents/lb. after hitting a contract low of 97.175 cents. December live cattle fell 1.35 cents to 102.225, after posting a contract low at 101.25 cents.

Feeder cattle futures followed the weaker trend, with CME October feeders settling down 1.1 cents at 132.325 cents/lb.

Lean hog futures closed mixed, with the most-active October contract pressured by weak domestic hog and pork values.

Cash hog prices in the key Iowa and southern Minnesota market fell $1.16 on Thursday, and the pork cutout fell 90 cents, according to the U.S. Department of Agriculture (USDA).

CME deferred hog futures closed higher, supported by expectations of a pick-up in demand from China, where retail pork prices are soaring as the Asian country struggles with a meat shortage tied to outbreaks of African swine fever in its hog herd.

At the CME, October lean hog futures settled down 0.825 cent at 66.3 cents/lb., while December rose 0.25 cent to close at 65.475 cents.

“Those deferred contracts are trying to put in a premium, expecting that our export business will improve,” Hoops said.

China and the United States agreed to hold high-level trade talks in early October, raising hopes for a thaw in their trade dispute. China is the world’s top pork consumer.

However, Hoops said, “Even if we reach an agreement with China, (the October futures contract) does not have enough time to benefit from increased exports.”

— Reporting for Reuters by Julie Ingwersen in Chicago.

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