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U.S. Cattle Futures Decline on Weaker Cash Trade; Hogs Slide

12/13/2013 @ 2:11pm

U.S. livestock futures ended mostly lower Friday, pressured by profit taking and weaker cash cattle trade.

CME feeder-cattle for January ended flat with Thursday's close at $1.6707 a pound, which is again an eight-week high for the front-month contract, and marks a 1.6% gain from the end of last week. March feeder-cattle were also unchanged at $1.6655 a pound.

Live-cattle for December fell 0.37 cent, or 0.3%, at $1.3187 a pound, but was up 0.3% for the week.

Cattle futures rallied Thursday on a sharp break lower in projected feed costs. Corn futures slid further throughout the day after a group of senators on Thursday proposed a bill that would eliminate a mandate requiring a certain amount of ethanol, which is made from the grain, be blended into gasoline.

Feedyard operators have more incentive to pay up for lightweight cattle when the cost of feeding them to slaughter weight is lower, which can put less pressure on their break-even margins.

But following the midweek run-up, market watchers said cattle were easing on profit-taking.

Packers paying weaker prices for cattle in the cash markets also fueled losses in live-cattle futures. Trading activity in Nebraska, Kansas and Texas occurred mostly a penny per pound lower than last week's sales.

Between 12,000 and 14,000 head in Kansas were sold Friday for $1.31 a pound live, where beef processors bought cattle for mostly $1.32 in the prior trade. In Texas, a few pens were purchased at $1.31 a pound live, also a penny per pound lower than the majority of the previous sales.

Beef processors in Nebraska traded an estimated 5,000 head of cattle so far for $1.30 a pound live and $2.07 a pound dressed, down from last week's sale ranges of $2.08 and $2.09 a pound dressed and $1.31 to $1.33 a pound live.

Hog futures were pressured by a recent uptick in pork production. The most-active February hogs contract, which becomes the spot contract Monday, is still around six cents a pound higher than the current price of hogs, which fueled heavy selling in that issue during the last day of trading for the December futures.

Hogs for December settled 0.07 cent lower to 81.25 cents a pound. February hogs slid 0.82 cent at 87.17 cents a pound, down 2.1% on the week.


Write to Kelsey Gee at kelsey.gee@wsj.com

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(END) Dow Jones Newswires

December 13, 2013 15:07 ET (20:07 GMT)

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