Feb 11, Chicago Mercantile Exchange live cattle futures fell hard on Thursday, led by more disappointing prices for market-ready, or cash, cattle, traders said.
February live cattle closed 2.350 cents per lb lower at 130.125 cents, and April ended down 2.275 cents at 129.525 cents.
Cash cattle on Thursday morning in the U.S. Plains brought $128 to $134 per cwt, down from mostly $134 to $136 last week, said feedlot sources.
Earlier this week packers in Texas and Kansas bought cash cattle at $134, off $2 from last week's high.
Cash prices suffered after processors trimmed slaughters while trying to recover lost profits and stimulate seasonally tepid wholesale beef demand.
Thursday's average beef packer margin was a negative $36.75 per head, up from a negative $41.15 for Wednesday, as calculated by HedgersEdge.com.
The morning's wholesale choice beef price dropped 99 cents per cwt from Wednesday to $217.20. Select cuts were $1.13 higher at $214.75, the U.S. Department of Agriculture said.
Some packers also priced supplies based on CME live cattle futures that were heavily pressured by the U.S. stock market slump amid heightened global economic fears.
"With the stock market being so shaky, cattle traders are nervous about higher-priced beef moving in an environment in which consumers might be nervous," said independent livestock futures trader Dan Norcini.
Live cattle market liquidation sent CME feeder contracts lower. March feeders were 0.975 cent per lb lower at 150.250.
Hog futures close higher
CME lean hogs drew strength from traders that simultaneously bought those contracts and sold live cattle futures, traders said.
Hog fundamentals are more supportive than cattle given cheaper pork than beef compared with historical norms, said Norcini.
The morning's wholesale pork price fell $1.51 per cwt from Wednesday to $75.54, after the more than $4 drop in ham costs, the USDA said.
Lean hog futures received an added boost from steady cash prices, because of tight seasonal supplies, and fund buying after contracts surpassed key technical trading levels.
The average cash hog price in Iowa/Minnesota on Thursday morning was up 3 cents per cwt from Wednesday to $62.90, the USDA said.
Spot February, which will expire on Friday, ended up 0.375 cent per lb to 65.525.
April closed 1.100 cents higher at 69.450 cents and above the 20-day moving average of 69.22 cents. May finished 0.975 cent higher at 75.650 cents after topping the 200-day moving average of 74.94 cents.