By Theopolis Waters
CHICAGO, Dec. 13 (Reuters) - Chicago Mercantile Exchange
live cattle on Friday settled lower as weaker-than-expected cash
prices and sluggish wholesale beef demand weighed, traders said.
Cash cattle in Texas and Kansas traded at $131 per
hundredweight (cwt), down $1 from a week ago, according to
Friday afternoon's wholesale choice beef price slumped $1.56
from Thursday to $198.89 per cwt, while select rose 39 cents to
$187.01, based on U.S. Department of Agriculture data.
'I thought we'd see a steady cash trade but changed my mind
because of what beef is doing. All of a sudden it seems they
(packers) can't seem to give it (beef) away,' said Oak
Investment Group president Joe Ocrant said.
East Coast grocers may be leery about having a huge amount
of expensive beef on hand if consumers are unable to venture out
amid another round of inclement weather in the area, he said.
The inability of packers to move fresh beef has eroded their
margins, which could prompt them to cutback slaughter rates.
Beef packer margins for Friday were at a negative $54.40 per
head, compared with a negative $42.10 on Thursday and negative
$39.00 a week ago, according to HedgersEdge.com.
Late-session short-covering and speculative buying lifted
futures from session lows.
December live cattle finished 0.375 cent per lb
lower at 131.875 cents. February ended at 132.850 cents,
down 0.250 cent.
CME feeder cattle ended steady, pressured by weak live
cattle futures, while lower Chicago Board of Trader corn prices
CBOT corn for March delivery ended down 8-3/4 cents at
$4.25-1/2 a bushel, partly on jitters that China may reduce
Less-costly feed could mean reduced input costs for
feedlots, encouraging them to buy young cattle.
Feeder cattle January and March contracts
closed unchanged at 167.075 cents and 166.550 cents,
HOG FUTURES BOW TO CASH
Hog futures at the CME lost ground in response to lower cash
hog and wholesale pork prices, traders and analysts said.
December hogs expired from trading on Friday at noon
CST (1800 GMT). It settled down 0.075 cent per lb at 81.250
cents per lb and nearly in line with CME's hog index at 81.15
February, the new lead month, closed at 87.175
cents, 0.825 cent lower, and April ended 0.450 cent
lower at 91.500 cents.
'Cash prices are being dragged down by the cutout and heavy
hogs. And February looked awfully pricey compared to the index
after December expired,' a trader said.
USDA data on Friday afternoon quoted the average price of
hogs in the closely watched Iowa/Minnesota market at $76.25 per
cwt, $2.07 lower than Thursday.
Friday morning's wholesale pork price, or cutout, dropped
$1.59 per cwt to $86.54 per cwt, as the cost for hams shed
$5.06, USDA said.
The price of ham at wholesale tends to decline this time of
year as end users get closer to buying all they need for the
(Editing by Meredith Mazzilli)
Keywords: MARKETS LIVESTOCK/CATTLE
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