Slumping beef prices rattle CME live cattle futuresCHICAGO - Chicago Mercantile Exchange live cattle futures closed lower on Friday, pulled down by profit-taking in response to the day's sharp drop in wholesale beef values, traders said.
By: Theopolis Waters, Reuters
CHICAGO - Chicago Mercantile Exchange live cattle futures closed lower on Friday, pulled down by profit-taking in response to the day's sharp drop in wholesale beef values, traders said.
June closed 1.175 cents per lb lower at 152.325 cents, and August fell 1.475 cents to 151.275 cents.
Friday morning's choice wholesale beef price tumbled $4.14 per hundredweight (cwt) from Thursday to $255.11. Select cuts fell $3.17 to $243.57, the U.S. Department of Agriculture said.
Retailers shied away from beef, possibly waiting for a downturn in prices after they rose on last-minute buying last week for Memorial Day, said Livestock Marketing Information Center Director Jim Robb.
Some traders blamed reduced meat sales on prolonged periods of heavy rains in the Midwest that prevented backyard barbecues.
Futures' retreat and slack wholesale beef demand backed speculation that packers may spend the same or less for market-ready, or cash, cattle this week.
Cash bids in Kansas held at $156 to $158 per cwt against up to $164 asking prices there and elsewhere in the U.S. Plains. A week ago, cattle in the Plains moved at mostly $159 to $161.
Recent wholesale beef demand woes stirred bear spreads that consisted of investors who sold June and bought deferred trading months.
CME feeder cattle were pressured by profit-taking and the live cattle futures' selloff.
August ended 2.000 cents per lb lower at 222.950 cents.
CME lean hogs settled lower after investors pocketed profits on the last trading day in May, traders said.
June closed down 0.775 cent per lb at 83.825 cents, and July 1.175 cents lower at 83.450 cents.
The morning's cash price pullback put traders on the defensive, although they were encouraged by strong wholesale pork values.
USDA data showed Friday morning's average cash hog price in the western Midwest dropped $1.58 per cwt from Thursday to $79.79.
Separate government data quoted the morning's wholesale pork price at $86.08 per cwt, $1.45 higher than on Thursday.
Packers struggled while pulling together hogs for Saturday's estimated 170,000-head slaughter and to ensure themselves of supplies for early next week, traders and analysts said.
Supermarkets are preparing to focus on pork and chicken after the end of National Beef Month in May and for Father's Day later in June, traders and analysts said.