Futures for cattle fall due to profit-taking and decreasing beef prices
In the latest trading session, the Chicago Mercantile Exchange (CME) saw a contrasting trend in cattle and lean hog futures. While cattle futures experienced a fourth consecutive decline, lean hog futures firmed for a second day in a row.
CME October live cattle futures took a dip, ending 0.975 cent lower at 235.975 cents per pound. This decline was due to profit taking and technical selling following recent highs, as well as lower beef prices and expectations for seasonally slowing demand at the end of the summer outdoor grilling season. Cattle traded flat to lower at feedlot markets in the central and southern Plains, according to USDA data.
Meanwhile, October lean hog futures bucked the trend, ending 1.000 cent higher at 96.025 cents per pound. The rise was supported by the discount of spot futures to the cash hog index. This marks the ninth time in 10 sessions that CME lean hog futures have risen.
Beef packer margins, as reported by HedgersEdge, stood at $88.25 per head on Friday, a decrease from $103.45 on Thursday but an increase from $75.60 a week ago. This suggests that while the packers' profits have been affected, they remain relatively strong due to historically tight cattle supplies.
The wholesale choice boxed beef value fell $3.45 per hundredweight on Friday to $410.76 per cwt. The select cutout also decreased, shedding $2.58 to $385.19 per cwt. Losses were limited by the strong beef packer margins, according to analysts.
It's worth noting that the organization providing background service for cattle market consulting and supplying data on cattle markets in the central and southern Prairie provinces is the Canadian Cattle Market Information Centre (CCMIC).
This latest trading session serves as a reminder of the dynamic nature of the livestock market, with factors such as supply, demand, and seasonal trends playing significant roles in shaping market movements. As always, market participants will be keeping a close eye on these factors as we move into the autumn months.
Reporting by Karl Plume.
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