CHICAGO, Aug 17 (Reuters) - Chicago Mercantile Exchange live cattle futures pulled back on Monday in profit taking ahead of the U.S. Department of Agriculture’s Cattle on Feed report at the end of the week, traders said.
Live cattle fell for the first day after eight sessions of gains. The pullback reflects uncertainty about the USDA findings on Friday, said Matthew Wiegand, risk management consultant at FuturesOne.
“We’ve still been running a little bit behind the year-ago pace on packer runs. There’s maybe a little residual concern until we see that number at the end of the week,” he said.
Beef slaughter rates climbed to 117,000 head on Monday, up 3.5% from a week ago and 1.7% more than a year ago.
Meanwhile, beef packer margins climbed Monday to $265.55 per head, the highest since July 14, according to Denver-based livestock marketing advisory service HedgersEdge.com.
Choice cuts of boxed beef climbed $2.17 to $216.41 per cwt, while select cuts increased by $2.01, to $201.30 per cwt, according to the U.S. Department of Agriculture.
Wiegand said the live market still has upside potential, as packers show signs they need more cattle.
“They should have incentive to get out there and keep bidding to pull cattle forward a little bit for their uncovered need,” he said.
CME October live cattle fell 0.350 cent to settle at 109.875 cents per pound. September feeder cattle slipped 2.175 cent to 144.4 cents per pound.
In the pork market, CME October lean hogs settled 0.500 cent higher at 53.525 cents per pound.
Daily hog slaughter also increased to 480,000 head, up 5% compared to a week ago and slightly more than a year ago. Wiegand said near term, herd size will likely be reduced, which could be supportive.
“We’ve curbed expansion,” he said. “If we can keep demand up, that moves cash prices of ready hogs.” (Reporting by Christopher Walljasper; Editing by Tom Brown)
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