CHICAGO, April 22 (Reuters) - U.S. cattle futures closed lower on Thursday for the 10th time in the last 11 sessions, pressured by fund-driven long liquidation and soaring corn prices that threaten cattle feeders’ profits, traders said.
Chicago Mercantile Exchange June live cattle futures settled down 1.400 cents at 115.850 cents per pound.
CME August feeder cattle futures ended down 3.550 cents at 148.375 cents per pound, pressured as Chicago Board of Trade corn futures climbed their daily limit and neared an eight-year high above $6 a bushel.
Rising prices for corn, the main cattle feed grain, could prompt feedlot operators to cut their losses by selling cattle more aggressively to meat packing houses.
“Feedlots have lost all leverage when bargaining with packers. They just want to move the cattle out of the lot as soon as they can, to minimize the expense,” said Dan Norcini, an independent trader.
Meanwhile, commodity funds hold a net long position in CME live cattle futures, leaving the market vulnerable to bouts of long liquidation.
The sell-off in cattle futures comes despite rising wholesale beef prices. Choice cuts of boxed beef rose $1.85 at $282.31 per cwt on Thursday, a 10-month high, and select cuts were up $1.81 at $273.69 per cwt, according to the U.S. Department of Agriculture.
Hog futures also declined on Thursday, with CME June lean hog futures down 0.975 cent at 103.550 cents per pound.
After the close, the USDA’s monthly Cold Storage report showed U.S. frozen pork belly stocks at 35.260 million pounds as of March 31, down 55% from a year ago. Frozen beef stocks fell to 483.650 million pounds, down 4% from a year ago.
The USDA’s weekly export sales report showed net sales reductions for pork totaling 22,100 tonnes in the week ended April 15, including significant cancellations for Mexico that the USDA attributed to a reporting error dating from 2020. But pork shipments for the week totaled 43,900 tonnes, a marketing-year high.
Traders await the USDA’s monthly cattle-on-feed report on Friday. Analysts surveyed by Reuters on average expect the USDA to show a 33.7% increase in the number of cattle placed in U.S. feedlots in March compared with the previous year.
Reporting by Julie Ingwersen; Editing by Sam Holmes
Our Standards: The Thomson Reuters Trust Principles.