July 20, 2017 / 8:08 PM / 8 months ago

LIVESTOCK-CME live cattle slump on profit-taking, cash price caution

    * Feeder cattle ends sharply lower
    * Lean hog contracts lose ground

    By Theopolis Waters
    CHICAGO, July 20 (Reuters) - Chicago Mercantile Exchange
live cattle futures closed lower on Thursday, erasing most of
Wednesday's gains, pressured by profit-taking and caution while
awaiting remaining cash prices, traders said.
    Technical selling contributed to market losses ahead of the
U.S. Department of Agriculture's monthly Cattle On Feed report
on Friday, traders said.            
    USDA will simultaneously publish the mid-year U.S. cattle
inventory report.
    August         ended 1.400 cents per pound lower at 115.875
cents and below the 10-day moving average of 116.175 cents.
October         finished down 1.800 cents lower at 117.075
    Market-ready, or cash, cattle at Wednesday's Fed Cattle
Exchange brought $118 to $118.50 per cwt versus $117 to $118.75
a week earlier.
    Bids for unsold market-ready, or cash, cattle in the U.S.
Plains held at $115 to $117 per cwt against $120 to $122 asking
prices, said feedlot sources.
    Market bulls expect unsold cattle to go for around $119 per
cwt based on near-term tight supplies and still profitable
processor margins.        
    Bearish investors cited seasonally sluggish wholesale beef
and the outlook for increased supplies ahead for possible weaker
cash returns.             
    "The cash market has been fairly resilient, but we're going
to get into bigger numbers coming into mid-August," said
Vetterkind Cattle Brokerage president Troy Vetterkind.
    CME feeder cattle closed sharply lower following
profit-taking, higher corn prices and live cattle futures
    August feeders         ended 2.225 cents per pound lower at
152.275 cents.

    Thursday morning's weaker wholesale pork values and
downward-trending cash prices pared Wednesday's CME lean hog
advances, said traders.
    August futures succumbed to technical selling after
investors sold that contract and at the same time bought
deep-deferred trading months.
    August         closed 1.475 cents per pound lower at 81.100
cents, and below the 40-day moving average of 81.182 cents.
October         ended down 0.950 cent to 67.850 cents.
    Ample supplies dropped cash hog prices for a fifth
consecutive session, a trader said. Thursday's record-high pork
belly price at $214.41 per cwt minimized the decline in the
overall wholesale pork value, he said.          
    Scant pork belly inventories are behind the surge in product
prices at wholesale, but demand will likely diminish once those
wholesale prices push retail bacon higher, an analyst wrote in
his newsletter to clients.

 (Editing by Meredith Mazzilli)
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