CME live cattle futures climb on cash market optimism

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CHICAGO — Chicago Mercantile Exchange live cattle futures ended higher on Friday on expectations of higher cash cattle prices next week and position-squaring ahead of a long U.S. holiday weekend, traders said.

Benchmark CME October live cattle futures settled up 1.750 cents at 144.550 cents per lb, with December up 1.675 cents at 150.250 cents.

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CME October feeder cattle followed live cattle higher, rising 0.600 cent to close at 184.950 cents per lb, shrugging off pressure from a bounce in corn futures.

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An early rally in Wall Street stock indexes faded, but the dollar cooled, supporting commodities, after data showed the U.S. labor market is starting to loosen. Markets will be closed on Monday for the federal Labor Day holiday.

Fat cattle traded in the southern Plains cash markets this week at around $141 per hundredweight (cwt), down $1 to $2 from last week as meat packers covered their needs for a holiday-shortened kill schedule next week. But packers will have one less day next week to purchase cattle for a full schedule the following week, a factor that should lift prices.

“There’s a sense that the cash market is going to stay firm here,” said Doug Houghton, analyst at Brock Capital Management.

In the U.S. wholesale beef market, choice cuts rose $1.35 to $259.42 per hundredweight (cwt) on Friday, pausing after a slide to a 3-1/2 month low on Thursday. Select cuts rose $1.99 to $238.58 per cwt, according to the U.S. Department of Agriculture (USDA).

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CME lean hog futures closed lower, pressured by falling cash hog prices. October lean hogs ended down 1.925 cents at 90.025 cents per lb while December hogs fell 1.075 cents to close at 82.700 cents per lb.

The CME Lean Hog Index, a two-day weighted average of cash hog prices, fell to $106.26 per cwt, down $1.36 from a day earlier and its lowest since June 2.

“Cash hog prices are just plunging at this point,” Houghton said. “It’s seasonally increasing hog supplies. And hog weights will probably start to go back up again soon,” he added.

Wholesale pork prices steadied a day after falling to the lowest level since mid-May. The USDA priced pork carcasses at $102.25 per cwt on Friday afternoon, up 39 cents from Thursday. (Reporting by Julie Ingwersen; Editing by Lisa Shumaker)