CME Live Cattle 9-month Low; Cash Prices Plunge
Chicago Mercantile Exchange live cattle futures sank to a nine-month low on Thursday, weighed down by seasonally tepid wholesale beef demand and sharply lower prices for slaughter-ready, or cash, cattle, traders said.
Thursday's market losses triggered pre-established sell orders. And fund liquidation developed after August and October futures fell below their respective 200-day moving averages of 108.217 and 107.371 cents.
August ended 2.350 cents per pound at 107.125 cents, and October closed 2.100 cents lower at 106.225 cents.
So far this week packers paid $110 per cwt for a small number of cash cattle in the U.S. Plains, down $5 to $6 from a week earlier.
Packers resisted bidding up for cattle whose numbers, and weights, are increasing seasonally at a time when beef demand remains weak.
"This is traditionally a slow time for beef demand, although there should be some retail buying before Labor Day. The other thing are these big supplies," said Brock Associates Inc analyst Doug Houghton.
From Monday to Thursday packers processed an estimated 467,000 head of cattle, 14,000 more than the same period a year ago.
Near-term bearish fundamentals deterred would-be market bargain hunters, still drawn to futures that remain bullishly undervalued, or discounted, to cash prices.
The market outlook was uncertain after Thursday's abrupt U.S. stock market retreat on escalating worries about the Trump administration's ability to push through its economic agenda, and as the United States drew a hard line for renegotiating the North American Free Trade Agreement.
"What's not helping us is the stock market is in the tank and the beef markets tend to have an eye on that," said Houghton. Sell stops and live cattle futures tumble sent CME feeder cattle down to its lowest point in three months.
August feeders closed 1.775 cents per pound lower at 140.475 cents.
Hogs Hig Multi-month Lows
Cash hog prices, pressured by plentiful seasonal supplies, pushed CME lean hogs to a 3-1/2 month low, said traders.
They said hog futures drew more pressure from selling in the neighboring live cattle markets.
October ended 1.850 cents per pound lower at 66.925 cents, and December finished 1.675 cents lower at 61.800 cents.
