Fund-selling Extends CME Live Cattle Futures Losses
Chicago Mercantile Exchange live cattle futures closed lower on Tuesday, led by lingering bearishness from last Friday's U.S. Department of Agriculture cattle reports, traders said.
USDA's reports suggested a supply buildup in the coming months, which dropped futures by their 3-cent per pound daily price limit on Monday.
August ended 0.700 cent per pound lower at 113.175 cents, and October settled 1.625 cents lower at 112.775 cents.
CME live cattle will resume its normal 3.000-cent trading limit on Wednesday after failing to end up or down the expanded 4.500-cent limit on Tuesday.
Investors traded cautiously while waiting for market-ready, or cash, cattle to change hands this week. A week earlier, cash cattle in the U.S. Plains fetched $117 to $120.50 per cwt.
Packers might avoid bidding up for cattle given recent futures selling and the outlook for increased cattle numbers ahead, said traders and analysts.
Still, tight cattle supplies in parts of the Plains, and the prospect that wholesale beef values might be forging a seasonal bottom, could underpin some cash returns.
Market participants look for Wednesday's Fed Cattle Exchange sale of about 2,100 animals to set the tone for this week's cash returns. Cattle there last week brought $118 to $118.50 per cwt.
CME live cattle selling and sharply lower cash feeder cattle prices pressured the exchange's feeder cattle contracts for a second straight day.
August feeders ended 1.925 cents per pound lower at 146.525 cents. CME feeder cattle will return to the normal 4.500-cent limit on Wednesday after not settling up or down Tuesday's 6.750-cent expanded limit.
Hog Market Closes Higher
Short-covering and futures' discounts to CME's hog index for July 21 at 91.13 cents lifted contracts from Monday's lows, said traders.
August closed 1.075 cents per pound higher at 81.450 cents, and October up 0.400 cent to 66.850 cents.