Live cattle ease on weak cash market, demand - CME
Lean hogs hit highest in nearly 4 months
7 July 2023
2 minute read
By: Chicago Mercantile Exchange (CME) live cattle futures declined on Thursday as a weak tone to the cash market and worries about slowing beef demand weighed on prices, Reuters reported, citing traders.
Livestock traders were monitoring cash market activity at Plains feedlots, where fed cattle were lightly bid at $178 per cwt, below the bulk of cash market sales last week.
After dropping over the past three weeks, cash cattle prices may remain under pressure this week due to seasonally softening beef demand and eroding packer margins.
"We're still trying to figure out the cash market direction for the week. ... The nearby board for live cattle at 174 (cents per pound) is discounting the cash," said Alan Brugler, president of Brugler Marketing & Management.
The choice boxed beef cutout fell by $2.91 per cwt on Thursday to $319.87, a day after tumbling by $5.56, US Department of Agriculture data showed. The select cutout was down $4.33 over two days.
The average beef packer margin on Thursday thinned to $100.45 per head, down from $165.30 two weeks ago, according to advisory service HedgersEdge.com.
August live cattle ended down 0.375 cent at 174.575 cents per pound. October futures fell 0.450 cent to 177.425 cents per pound.
Feeder cattle futures dropped as corn prices rebounded from Wednesday's 2-1/2 year lows. August feeders ended 2.425 cents lower at 242.275 cents per lb.
Lean hog futures were mostly higher, supported by tight supplies and cash pork prices near their highest level since August 2022.
CME August lean hogs rose to the highest in nearly four months after breaching chart resistance at its 200-day moving average. But the actively traded contract settled just below the key technical level at 97.125 cents per pound, down 0.325 cent on the day. Deferred contract were up as much as 1.150 cents.
