Commodities

LIVESTOCK-CME live cattle falls as cash market idles

Chicago Mercantile Exchange live cattle futures fell, pressured by a stagnant cash market and processing backups, traders said.

By Christopher Walljasper

CHICAGO, Oct 22 (Reuters) - Chicago Mercantile Exchange live cattle futures fell, pressured by a stagnant cash market and processing backups, traders said.

CME December live cattle futures LCZ1 settled down 1.225 cents at 128.325 cents per pound. January feeder cattle futures FCF2 eased 2.675 cents to end at 157.325 cents per pound.

For the week, live cattle futures lost 2.35 cents, a 1.87% decline.

Processing capacity has been constrained by labor shortages, which have in turn stagnated cash cattle prices, said Altin Kalo, economist at Steiner Consulting Group.

"Its stuck in neutral for a bit, without any movement," he said. "Until we get the front-end supply current, we're just going to spin our wheels here."

Cash trade was light across the U.S. Great Plains, with live cattle selling for $124 per hundredweight in the south and as high as $126.50 in the north, the U.S. Department of Agriculture said.

The USDA's monthly cattle on feed report, released after the market close on Friday, showed September cattle placements at 97% year-over-year, beneath trade estimates of 101.4%.

"The cattle on feed report recognized that we don't have all these excess cattle out there and eventually that's going to show up in the marketplace," said Kalo.

All cattle on feed as of Oct. 1 was 99% versus a year ago, while cattle marketings in September were 97% year-over-year, both in line with trade estimates.

Boxed beef prices firmed, with choice cuts adding $1.16 to $281.82 per hundredweight, while select cuts firmed 0.39 cents to $263.11, the USDA said.

Meanwhile, U.S. frozen beef stocks were 435.342 million pounds, up 4% from the previous month but down 8% from last year as of Sept. 30, the USDA said.

Lean hogs firmed slightly, but ended the week lower, pressured by easing cash prices and weaker wholesale pork prices.

CME December lean hog futures LHZ1 settled up 0.125 cents at 73.325 cents per pound. CME February hogs LHG2 ended down 0.050 cents at 76.625 cents per pound. For the week, December hogs lost 4.95 cents, a 6.32% loss.

"The cash market on the product side has softened, and that has certainly pushed the selling the last couple of sessions," said Kalo.

December hog futures lag the CME's Lean Hog Index, a two-day weighted average of lean hog values, which fell to $84.83. .IHX

The USDA reported total frozen pork supplies at 466.41 million pounds, up 2.67% from last month and nearly unchanged from a year ago. Frozen pork belly stocks of 13.032 million pounds, were down 37% from last month and 44% from last year.

(Reporting by Christopher Walljasper; Editing by Devika Syamnath)

((Christopher.Walljasper@thomsonreuters.com; 1 630 269 3072; Reuters Messaging: christopher.walljasper.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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