CHICAGO, Sept 22 (Reuters) – Live cattle and feeder cattle futures stumbled on the Chicago Mercantile Exchange on Tuesday as traders waited to see how strong cash prices and consumer demand for U.S. beef will be this week, analysts said.
The markets pulled back after soaring on Monday because the U.S. Department of Agriculture last week reported lower-than-expected placements of cattle into feedlots in August.
“Seeing some profit-taking and consolidation here is not too big of a surprise,” said Matt Wiegand, risk management consultant for FuturesOne. “We’ll see where the dust settles on cash trade and where beef demand goes here short-term.”
CME October live cattle futures closed 2.175 cents lower at 218.775 cents per pound. Benchmark December live cattle fell 2.550 cents to 219.450 cents a pound.
October feeder cattle futures ended down 2.225 cents at 328.025 cents per pound.
Traders said cash prices last week were near $226 per hundredweight following the USDA report, steady to firmer from a week earlier. This week, positive margins for meatpackers should help support higher cash prices, Wiegand said.
Meatpackers were earning $80.85 for each head of cattle they slaughtered, up from $30.50 on Monday, according to HedgersEdge.com.
Traders assessed beef demand as prices rose. Choice cuts of boxed beef increased by $2.54 to $378.89 per hundredweight (cwt), while select cuts were up by $2.08 at $357.85 per cwt, according to the U.S. Department of Agriculture (USDA).
In CME’s lean hog market, October futures ended up 1.125 cents at 79.275 cents per pound. Most-active December hogs advanced 1.200 cents to 71.000 cents after sliding to a contract low of 68.275 cents on Friday.
The U.S. hog herd was likely 0.8% smaller on September 1 than it was a year earlier, a Reuters survey of analysts showed ahead of the USDA’s quarterly Hogs and Pigs report due out on Thursday.
(Reporting by Tom Polansek in Chicago; Editing by Jonathan Ananda)
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