LIVESTOCK-Cargill news drops US live cattle to multi-month lows
* Fallen wholesale beef prices fuel more selling * Futures' see biggest pct loss in eight months * Feeder cattle futures fall for 9th straight day * Hog futures steady-lower, but up for the week By Theopolis Waters CHICAGO, Jan 18 (Reuters) - U.S. live cattle futures sank to multi-month lows on Friday as investors continued to digest Thursday's news that Cargill Inc. plans to close a Texas beef packing plant on Feb. 1, traders and analysts said. Cargill announced that the Plainview, Texas plant would be shut down due to tight cattle supplies after drought in the U.S. southwest reduced the cattle herd to its lowest in 60 years. Chicago Mercantile Exchange live cattle selling was likely based on the belief that the closure would result in a surplus of cattle until the industry can adjust to the loss of that plant, Citigroup futures specialist Art Liming said. At times, investors bought futures on breaks given already tight cattle numbers that could support prices for slaughter cattle moving forward, he said. Spot February closed 1.650 cent per lb lower at 124.950 cents. It earlier fell to an 8 1/2 month low. Most-actively traded April finished 1.050 cents lower at 129.825 and at one point drifted to its lowest point in 6 1/2 months. CME live cattle dropped 3.6 percent for the week, their biggest weekly percentage decline in eight months. Futures struggled for most of the week as processors spent less for supplies to recover lost margins and stabilize fallen wholesale beef prices. Packers also needed fewer cattle with plants scheduled to be offline on Monday for the Martin Luther King, Jr. holiday. Cattle in the cash market this week fetched $124 to $125 per cwt, compared with $125 to $128 last week, said feedlot sources. The price for wholesale choice beef Friday morning was $191.02 per cwt, $1.18 lower than Thursday; select cuts fell $1.84 to $182.52, according to the U.S. Department of Agriculture. And, HedgersEdge.com put the average beef packer margin for Friday at a negative $44.30 per head, compared with a negative $36.95 on Thursday and a negative $65.10 on Jan. 11. CME feeder cattle spot February dropped with the lower live cattle market. Futures fell for a ninth day in a row resulting in their biggest weekly percentage loss in six months at 3.7 percent. Meanwhile, short covering and bearish spreads propped up remaining feeder cattle contracts. Spot January closed 0.500 cent per lb lower at 143.900 cents. Most-actively traded March was up 0.500 cent to 146.350 cents and April ended at 148.850 cents, 0.625 cent higher. CATTLE WEIGHS ON HOGS Hog futures settled steady to weaker with profit taking and heavy live cattle losses weighing on the February contract, said analysts and traders. "If beef prices continue to come down, pork will have to move lower to compete," one trader said. Meanwhile, bearish spreads underpinned remaining hog trading months in anticipation of tighter supplies. Spot February hogs settled 0.600 cent per lb lower at 85.350 cents. April unchanged at 88.075 cents. CME live hogs finished up 1.6 percent for the week, mainly lifted by higher cash hog prices. USDA data Friday morning showed the average price for hogs in the western Midwest direct market up $1.63 per cwt from Thursday to $87.89, said USDA. Packers have all the hogs they need heading into the weekend and Monday's holiday, traders and analysts said. But, they said colder weather headed to parts of the U.S. Plains next week could slow animals weight gains, reducing their availability to packers.
- Japan expands army footprint for first time in 40 years, risks angering China
- Deadly gun attack in eastern Ukraine shakes fragile Easter truce |
- Prosecutors extend Korea ferry captain's detention as death toll mounts |
- South Korea recovers first bodies from inside sunken ferry
- South Korea recovers first bodies from inside sunken ferry |